Exhibit 10.1

 

THIS RESTRUCTURING SUPPORT AGREEMENT IS NOT AN OFFER WITH RESPECT TO ANY
SECURITIES OR A SOLICITATION OF ACCEPTANCES OF A CHAPTER 11 PLAN WITHIN THE
MEANING OF SECTION 1125 OF THE BANKRUPTCY CODE. ANY SUCH OFFER OR SOLICITATION
WILL COMPLY WITH ALL APPLICABLE SECURITIES LAWS AND/OR PROVISIONS OF THE
BANKRUPTCY CODE. NOTHING CONTAINED IN THIS RESTRUCTURING SUPPORT AGREEMENT SHALL
BE AN ADMISSION OF FACT OR LIABILITY OR, UNTIL THE OCCURRENCE OF THE AGREEMENT
EFFECTIVE DATE ON THE TERMS DESCRIBED HEREIN, DEEMED BINDING ON THE PARTIES
HERETO.

 

RESTRUCTURING SUPPORT AGREEMENT

 

This RESTRUCTURING SUPPORT AGREEMENT (including all exhibits and schedules
attached hereto and incorporated herein in accordance with Section 2, this
“Agreement”) is made and entered into as of August 3, 2017 (the “Agreement
Effective Date”), by and among the following parties:

 

i.Crossroads Systems, Inc., a Delaware corporation (the “Debtor”);

 

ii.210/CRDS Investment LLC, a Texas limited liability company (“210”); and

 

iii.the other persons or entities that are listed on the signature pages hereto
or that join in this Agreement (such parties, the “Consenting Preferred
Shareholders”; and collectively with the Debtor and 210, the “Parties”).

 

RECITALS

 

WHEREAS, the Parties have engaged in good-faith, arm’s-length negotiations
regarding a restructuring transaction (the “Restructuring”) pursuant to the
terms and upon the conditions set forth in this Agreement;

 

WHEREAS, the Debtor intends to file a case (the “Chapter 11 Case”) under chapter
11 of title 11 of the United States Code, 11 U.S.C. §§ 101-1532 (the “Bankruptcy
Code”), in the United States Bankruptcy Court for the Western District of Texas
(such court, or another bankruptcy court of competent jurisdiction with respect
to the subject matter, the “Bankruptcy Court”) to effect the Restructuring
through a confirmed prepackaged chapter 11 plan of reorganization (the “Plan”);

 

WHEREAS, the Debtor has issued and outstanding 2,591,257 shares of Series F
convertible preferred stock with a par value of $0.001 (the “Preferred Stock”;
and such holders of Preferred Stock, the “Preferred Shareholders”);

 

WHEREAS, the Debtor has issued and outstanding 1,225,472 shares of common stock
with a par value of $0.001 (the “Common Stock”; and such holders of Common
Stock, the “Common Shareholders”), which Common Stock shall be cancelled
pursuant to the Plan and replaced with shares of New Common Stock (as defined
below);

 

 

 

 

WHEREAS, pursuant to the Plan, (a) creditor claims will be unimpaired, (b)
Preferred Shareholders shall receive, pro rata, in exchange for their Preferred
Stock, $2,672,233.78 in cash and approximately 230,680 newly issued shares of
Common Stock (the “New Common Stock”) of the Reorganized Debtor (as defined
below), which New Common Stock shall have a par value of $0.001 per share, and
(c) Common Shareholders shall each receive an equivalent number of shares of New
Common Stock as the number of shares of Common Stock currently held by such
Common Shareholders;

 

WHEREAS, pursuant to the Plan and that certain Securities Purchase Agreement to
be executed by and between the Reorganized Debtor (as hereinafter defined) and
210 (the “SPA”), the form of which is attached hereto as Exhibit B, upon
consummation of the Plan (the “Plan Effective Date”), the Reorganized Debtor, as
reorganized in accordance with the Plan (the “Reorganized Debtor”), will issue,
and 210 will purchase 1,427,314 shares of New Common Stock, or such other number
of shares of New Common Stock that shall constitute 49.49% of the outstanding
New Common Stock for an aggregate cash consideration of $4,000,000, which
ownership percentage shall not be subject to dilution;

 

WHEREAS, pursuant to the Plan and a loan agreement to be executed on the Plan
Effective Date (the “Loan Agreement”), 210 will agree to provide up to
$10,000,000.00 in unsecured loans to the Reorganized Debtor to finance
acquisitions;

 

WHEREAS, the Parties have agreed to certain terms with respect to the
organization and governance of the Reorganized Debtor, after the Agreement
Effective Date (as defined below) as more fully described herein; and

 

WHEREAS, the Parties have agreed to take certain actions in support of the
Restructuring on the terms and conditions set forth in this Agreement.

 

NOW, THEREFORE, in consideration of the covenants and agreements contained
herein, and for other valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, each Party, intending to be legally bound hereby,
agrees as follows:

 

AGREEMENT

 

Section 1.  Agreement Effective Date.

 

This Agreement shall become effective and binding upon the Debtor and 210 upon
the execution and delivery by both Parties of counterpart signature pages and,
subsequently, shall become effective and binding upon any other Party upon the
execution and delivery by such Party of a joinder agreement substantially in the
form attached hereto as Exhibit A (a “Joinder Agreement”).

 

Section 2.  Exhibits Incorporated by Reference.

 

Each of the exhibits attached hereto is expressly incorporated herein and made a
part of this Agreement, and all references to this Agreement shall include the
exhibits. In the event of any inconsistency between this Agreement (without
reference to the exhibits) and the exhibits, this Agreement (without reference
to the exhibits) shall govern.

 

 2 

 

 

Section 3.  Definitive Documentation.

 

The definitive documents and agreements governing the Restructuring
(collectively, the “Definitive Documentation”) shall consist of (a) the Plan
(and all exhibits thereto); (b) the disclosure statement in support of the Plan
(the “Disclosure Statement”); (c) the order of the Bankruptcy Court, in form and
substance acceptable to the Debtor and 210, approving the Disclosure Statement
and confirming the Plan (the “Confirmation Order”) and pleadings in support of
entry of the Confirmation Order; (d) the solicitation materials with respect to
the Plan (collectively, the “Solicitation Materials”); (e) any “first-day”
motions and orders; (f) an order authorizing the Debtor to assume and perform
its obligations under this Agreement (the “RSA Assumption Order”); (g) the
Warrant/Option Rejection Order (as defined below); (h) the SPA and all exhibits
and attachments thereto; and (i) all other documents that will comprise the
supplement to the Plan (as defined in the Plan, the “Plan Supplement”) or are
otherwise attached as exhibits or attachments to, or are contemplated by, this
Agreement, the SPA, or any of the other foregoing documents. The documents
constituting the Definitive Documentation (i) remain subject to negotiation and
completion, (ii) shall upon completion, contain terms, conditions,
representations, warranties, and covenants consistent with the terms of this
Agreement, and (iii) shall be in all material respects acceptable to the Debtor
and 210.

 

Section 4.  Commitments Regarding the Restructuring.

 

4.01.       Agreements Regarding the Bankruptcy Process, the Plan and Definitive
Documentation.

 

(a)          The Parties agree that the Debtor shall make its reasonable best
efforts to meet the following milestone target dates in connection with the
Chapter 11 Case (the “Milestones”) unless agreed otherwise by 210 and, in any
event, subject to the Bankruptcy Court’s availability:

 

(i)          at least one (1) day before the Confirmation Order is entered, (A)
the Debtor’s Common Stock owned by Lone Star Value Investors, LP (“Lone Star”)
shall be distributed by Lone Star to its respective direct or indirect equity
owners, none of whom shall be a “5% shareholder” of the Debtor for federal
income tax purposes, and (B) Lone Star, in compliance with permitted guidelines,
shall provide information to the Debtor to permit the Debtor to determine how to
classify such beneficial owners of Common Stock for purposes of Section 382 of
the Internal Revenue Code;

 

(ii)         promptly after executing this Agreement, the Debtor shall commence
a solicitation of acceptance or rejection of the Plan by the Preferred
Shareholders by sending to each such Preferred Shareholder a copy of the Plan,
the Disclosure Statement and the Solicitation Materials (including a ballot)
(the “Solicitation Commencement Date”), and shall set the deadline for receipt
of such acceptances or rejections of the Plan as the date that is 21 days after
the Solicitation Commencement Date (the “Solicitation Deadline”);

 

(iii)        no later than one (1) business day following the Solicitation
Deadline (if the Debtor receives acceptances of the Plan from the holders of at
least two-thirds (2/3) in amount of the Preferred Shares), but in no event later
than three (3) business days following receipt of acceptances of the Plan from
the holders of at least two-thirds (2/3) in amount of the Preferred Shares, the
Debtor shall commence the Chapter 11 Case;

 

 3 

 

 

(iv)        no later than August 31, 2017, the Debtor shall have commenced the
Chapter 11 Case (such commencement date, the “Petition Date”);

 

(v)         no later than one (1) business day after the Petition Date, the
Debtor shall:

 

(A)file its Plan as a pre-packaged plan of reorganization;

 

(B)file its Disclosure Statement in support of the Plan;

 

(C)file a motion to (i) shorten the bar date to a date that is not more than
thirty-five (35) days after the Petition Date, (ii) set a combined hearing on
approval of the Disclosure Statement and confirmation of the Plan (the “Plan and
Disclosure Statement Hearing”) and an objection deadline with respect thereto,
and (iii) approve a form of mail and publication notice to stakeholders
regarding (x) commencement of the Chapter 11 Case, (y) the shortened claims bar
date, and (z) the Plan and Disclosure Statement Hearing and the objection
deadline;

 

(D)file its schedules of assets and liabilities and schedule of financial
affairs;

 

(E)file a motion to limit the trading of the Debtor’s Common Stock and Preferred
Stock during the pendency of the Chapter 11 Case;

 

(F)file a motion pursuant to section 365 of the Bankruptcy Code requesting entry
of the RSA Assumption Order;

 

(G)file a motion requesting entry of an order (i) rejecting the Warrant/Option
Agreements (as defined below) and (ii) establishing the maximum amount of
allowed Subordinated Claims (as defined below) at an amount not greater than
$10,000.00 (the “Warrant/Option Rejection Order”); and

 

(H)file such other “first-day” motions as shall be agreed to by and between the
Debtor and 210;

 

(vi)        no later than five (5) business days after the Petition Date, the
Bankruptcy Court shall have entered final or interim orders, as applicable,
approving the motions referenced in Section 4.01(a)(v)(C) and (E);

 

(vii)       no later than ten (10) business days after the Petition Date, the
Bankruptcy Court shall have entered the RSA Assumption Order;

 

 4 

 

 

(viii)      no later than five (5) business days after the Petition Date, the
Bankruptcy Court shall have entered an order scheduling the Plan and Disclosure
Statement Hearing;

 

(ix)         no later than forty-five (45) days after the Petition Date, the
Bankruptcy Court shall have commenced the Plan and Disclosure Statement Hearing;

 

(x)          no later than five (5) business days after the conclusion of the
Plan and Disclosure Statement Hearing, the Bankruptcy Court shall have entered
the Confirmation Order;

 

(xi)         no later than December 31, 2017, the Plan Effective Date (as
defined below) shall have occurred; and

 

(xii)        no later than the Plan Effective Date, the Bankruptcy Court shall
have entered the Warrant/Option Rejection Order.

 

(b)          The Plan or other Definitive Documentation, as applicable, shall
contain the following key elements:

 

(i)          the Plan shall incorporate and provide for the implementation of
the SPA and all related documents, including, without limitation, the Loan
Agreement;

 

(ii)         all agreements relative to the issuance of Warrants/Options,
including any such agreements executed in connection with employment agreements
(collectively, the “Warrant/Option Agreements”) shall be rejected;

 

(iii)        the employment agreements referenced above, and any other executory
contracts and unexpired leases designated as assumed contracts by 210 on or
prior to the Plan Effective Date, shall be assumed and all other executory
contracts and unexpired leases shall be rejected;

 

(iv)        the Plan shall have the following classes of claims and interests
(each, a “Class”), and the treatment of such claims and interests:

 

(A)Class of “Secured Claims”, will be unimpaired and not entitled to vote;

 

(B)Class of “General Unsecured Claims”, will be unimpaired and not entitled to
vote;

 

(C)Class of “Subordinated Claims”, will be comprised of all claims subject to
subordination pursuant to section 510(b) of the Bankruptcy Code, including any
claims arising from rejection of the Warrant/Option Agreements; this Class will
be unimpaired and not entitled to vote;

 

 5 

 

 

(D)Class of “Preferred Equity Interests”, will be comprised of existing
Preferred Stock, and each Preferred Shareholder shall receive, in exchange for
its Preferred Stock and any claims, rights or interests related thereto, its pro
rata share of (x) $2,672,233.78 in cash ($1.03125 per share) and (y) 230,680
shares of New Common Stock, or such other number of shares of New Common Stock
that shall constitute, in total, 8% of the New Common Stock; provided that no
fractional shares of New Common Stock shall be issued, and any fractional share
shall be rounded up or down to the nearest whole share; this class will be
impaired and entitled to vote;

 

(E)Class of “Common Equity Interests”, will be comprised of existing Common
Stock, which shall be cancelled, and each such Common Shareholder will be
issued, in exchange therefor, an equal number of shares of New Common Stock;
this Class will be unimpaired and not entitled to vote; and

 

(F)such other Classes as shall be agreed by the Debtor and 210 in accordance
with the applicable provisions of the Bankruptcy Code;

 

(v)         on the effective date of the Plan (the “Plan Effective Date”), all
of the Debtor’s then-existing directors, except for Richard K. Coleman, Jr. and
Robert G. Pearse (the “Continuing Directors”), shall voluntarily resign;

 

(vi)        on the Plan Effective Date, the board of the Reorganized Debtor
shall be set at five (5) directors, and, in addition to the Continuing
Directors, two directors designated by 210 and disclosed in the Plan Supplement
(the “210 Directors”) shall be appointed to the Reorganized Debtor’s board of
directors, and thereafter, a fifth independent director shall be appointed to
the Reorganized Debtor’s board of directors, which director shall be nominated
and approved by a majority of the Continuing Directors and the 210 Directors and
shall be an “Independent” director as defined by the NASDAQ (such director,
collectively with the Continuing Directors and the 210 Directors, the
“Post-Closing Board”); all such directors shall stand for re-election in 2018;

 

(vii)       the Debtor shall obtain directors and officers liability insurance
to be in force upon the Plan Effective Date, with coverage acceptable to all
Continuing Directors and 210 Directors, from financially sound and reputable
insurers, which insurance shall not be cancelable by the Debtor without prior
unanimous approval by the Post-Closing Board;

 

(viii)      the Plan shall amend the Debtor’s Certificate of Incorporation in
form and substance satisfactory to 210 in all respects to the extent necessary
to support or implement any action or agreement authorized by the Plan; and

 

(ix)         the Plan shall authorize the Debtor to issue shares of New Common
Stock pursuant to the Plan and in accordance with this Agreement,
notwithstanding any current limitations in the Debtor’s Certificate of
Incorporation or otherwise.

 

(c)          All conditions to the closing under the SPA shall have been
satisfied prior to the Plan Effective Date.

 

 6 

 

 

4.02.       Commitments of 210. During the period beginning on the Agreement
Effective Date and ending on a Termination Date (as defined below) (such period,
the “Effective Period”), 210 shall:

 

(a)          support and take all actions consistent with the terms of this
Agreement and necessary or reasonably requested by the Debtor to facilitate
consummation of the Restructuring;

 

(b)          negotiate in good faith all Definitive Documentation that is
subject to negotiation as of the Agreement Effective Date;

 

(c)          use reasonable efforts to execute any document and give any notice,
order, instruction, or direction necessary or reasonably requested by the Debtor
that is consistent with the transactions contemplated by this Agreement and the
Plan to support, facilitate, implement, consummate, or otherwise give effect to
the Restructuring; and

 

(d)          use good-faith efforts to negotiate, execute and implement the
Definitive Documentation on terms consistent with this Agreement.

 

4.03.       Commitments of the Consenting Preferred Shareholders. During the
Effective Period, each Consenting Preferred Shareholders shall:

 

(a)          support and take all actions consistent with the terms of this
Agreement and necessary or reasonably requested by the Debtor to facilitate
consummation of the Restructuring, including, without limitation, (i) after
careful review and evaluation of the Disclosure Statement, the Plan and the
Solicitation Materials, to timely vote to accept the Plan, in accordance with
the applicable procedures set forth in such documents, with respect to each and
all of its interests in the Debtor, now or hereafter owned by such Consenting
Preferred Shareholder or for which it now or hereafter serves as the nominee,
investment manager, or advisor for holders thereof, and (ii) to the extent such
election is available, not to elect on its ballot to preserve claims, if any,
that each Consenting Preferred Shareholder may own or control that may be
affected by any releases contemplated by the Plan;

 

(b)          not withdraw, amend, or revoke (or cause to be withdrawn, amended,
or revoked) its vote with respect to the Plan;

 

(c)          (i) use commercially reasonable efforts to support the confirmation
of the Plan and approval of the Disclosure Statement and the solicitation
procedures and (ii) not (A) object to, delay, interfere with, impede, or take
any other action to delay, interfere with or impede, directly or indirectly, the
Restructuring, confirmation of the Plan, or approval of the Disclosure Statement
or the solicitation procedures (including, but not limited to, joining in or
supporting any efforts to object to or oppose any of the foregoing), or (B)
propose, file, support, or vote for, or encourage or assist another person in
(x) filing, supporting or voting for any restructuring, workout, or chapter 11
plan for the Debtor other than the Restructuring and the Plan or (y) otherwise
initiating or joining in any legal proceeding that is inconsistent with this
Agreement, or delay, impede, appeal or take any other action that could
reasonably be expected to interfere with the approval, acceptance, confirmation,
consummation or implementation of the Restructuring or the Plan, as applicable;

 

 7 

 

 

(d)          not commence any proceeding to oppose or alter any of the terms of
the Plan or any other document filed by the Debtor in connection with the
confirmation of the Plan;

 

(e)          not object to the “first-day” motions and other motions consistent
with this Agreement filed by the Debtor in furtherance of the Restructuring;

 

(f)          not encourage any other person or entity to take any action,
including, without limitation, initiating or joining in any legal proceeding
that is materially inconsistent with this Agreement, or delay, impede, appeal,
or take any other negative action that could reasonably be expected to interfere
with the approval, acceptance, confirmation, consummation, or implementation of
the Restructuring or the Plan, as applicable;

 

(g)          negotiate in good faith all Definitive Documentation that is
subject to negotiation as of the Agreement Effective Date;

 

(h)          use reasonable efforts to execute any document and give any notice,
order, instruction, or direction necessary or reasonably requested by the Debtor
that is consistent with the transactions contemplated by this Agreement and the
Plan to support, facilitate, implement, consummate, or otherwise give effect to
the Restructuring; and

 

(i)          use good-faith efforts to negotiate, execute and implement the
Definitive Documentation on terms consistent with this Agreement.

 

4.04.       Commitments of the Debtor.

 

(a)          During the Effective Period, the Debtor shall:

 

(i)          negotiate in good faith all Definitive Documentation that is
subject to negotiation as of the Agreement Effective Date;

 

(ii)         comply with its obligations under the SPA and related documents,
including, without limitation, its obligation to issue 1,427,314 shares of New
Common Stock, or such other number of shares of New Common Stock that shall
constitute 49.49% of the outstanding New Common Stock of the Reorganized Debtor,
to 210 for a total cash purchase price of $4,000,000.00;

 

(iii)        cooperate with and provide mutual assistance to 210 in preparing a
post-Plan Effective Date operating plan for the Debtor that is in all respects
acceptable to 210, with such plan to be agreed upon by the Debtor and 210 by the
Plan Effective Date;

 

(iv)        support and complete the Restructuring and all transactions set
forth in this Agreement;

 

(v)         execute and deliver any other required agreements to effectuate and
consummate the Restructuring;

 

(vi)        make commercially reasonable efforts to obtain required regulatory
and/or third-party approvals for the Restructuring;

 

 8 

 

 

(vii)       complete the Restructuring in a timely and expeditious manner;

 

(viii)      operate its business in the ordinary course, taking into account the
Restructuring;

 

(ix)         not knowingly and intentionally undertake any actions materially
inconsistent with the adoption and implementation of the Plan and confirmation
thereof;

 

(x)          use commercially reasonable efforts to obtain court approval of any
releases set forth in the Plan;

 

(xi)         not terminate or amend the Amended Employment Agreements (as
defined below) without the written consent of 210; and

 

(xii)        not enter any contract, agreement or lease without the consent of
210.

 

(b)          During the Effective Period, the Debtor also agrees to the
following affirmative covenants:

 

(i)          the Debtor shall provide to counsel for 210 at least two (2)
calendar days (or such shorter prior review period as necessary in light of
exigent circumstances) prior to the date when the Debtor intends to file such
document draft copies of all “first-day” and “second-day” motions that the
Debtor intends to file with the Bankruptcy Court, and shall consult in good
faith with such counsel regarding the form and substance of any such proposed
filing with the Bankruptcy Court. Counsel to 210 shall provide all comments to
such motions by no later than one (1) calendar day (or within such time period
as is reasonably practicable in light of the time at which such motions were
provided to counsel for prior review) prior to the date when the Debtor intends
to file with the Bankruptcy Court such motions, and Debtor’s counsel shall
consult in good faith with such counsel to 210 regarding any comments so
provided if Debtor’s counsel shall not be in agreement with such comments. The
Debtor shall use reasonable efforts to provide counsel to 210 at least three (3)
calendar days prior to filing such material pleadings draft copies of all other
material pleadings that the Debtor intends to file with the Bankruptcy Court.
Counsel to 210 shall provide comments to such material pleadings by no later
than one (1) calendar day (or within such time period as is reasonably
practicable in light of the time at which such material pleadings were provided
to counsel for prior review) prior to the date when the Debtor intends to file
with the Bankruptcy Court such material pleadings. Debtor’s counsel shall
consult in good faith with such counsel to 210, regarding any comments so
provided in respect of any such material pleading if Debtor’s counsel shall not
be in agreement with such comments;

 

(ii)         the Debtor shall timely file a formal objection to any unresolved
motion filed with the Bankruptcy Court by a third party seeking the entry of an
order (A) directing the appointment of an examiner with expanded powers to
operate the Debtor’s businesses pursuant to section 1104 of the Bankruptcy Code
or a trustee, (B) converting the Chapter 11 Case to a case under chapter 7 of
the Bankruptcy Code, (C) dismissing the Chapter 11 Case, or (D) modifying or
terminating the Debtor’s exclusive right to file and/or solicit acceptances of a
plan of reorganization under section 1121 of the Bankruptcy Code; and

 

 9 

 

 

(iii)        the Debtor shall promptly notify 210 in writing of any governmental
or third-party complaints, litigations, investigations, or hearings (or
communications indicating that the same may be contemplated or threatened).

 

4.05.       Representations and Warranties of 210. 210 represents and warrants
that:

 

(a)          (i) it is an accredited investor (pursuant to Rule 501(a)(8) under
the Securities Act of 1933, as amended (the “Securities Act”)) and (ii) any
securities of any Debtor acquired by 210 in connection with the Restructuring
will be acquired for investment and not with a view to distribution or resale in
violation of the Securities Act;

 

(b)          as of the date hereof, it has no actual knowledge of any event
that, due to any fiduciary or similar duty to any other person or entity, would
prevent it from taking any action required of it under this Agreement; and

 

(c)          the execution, delivery, and performance of this Agreement does not
and shall not (i) violate any provision of law, rules, or regulations applicable
to it or any of its subsidiaries in any material respect; (ii) violate its
certificate of incorporation, bylaws, or other organizational documents or those
of any of its subsidiaries; or (iii) conflict with, result in a breach of, or
constitute (with due notice or lapse of time or both) a default under any
contractual obligation to which it is a party, which conflict, breach, or
default, would have a material adverse effect on the Restructuring.

 

4.06.       Representations and Warranties of the Debtor. The Debtor represents
and warrants that:

 

(a)          as of the Agreement Effective Date, it has no actual knowledge of
any event that, due to any fiduciary or similar duty to any other person or
entity, would prevent it from taking any action required of it under this
Agreement;

 

(b)          it incorporates by reference and hereby makes the representations
and warranties contained in the form of SPA and all related documents, as of the
Agreement Effective Date;

 

(c)          it is not aware of any outstanding Liabilities against it or
obligation owed by it other than any outstanding Liabilities identified in the
draft schedules of assets and liabilities and statement of financial affairs to
be distributed to 210 prior to the Petition Date. “Liabilities” shall mean any
liability, indebtedness or obligation of any kind (whether known, unknown,
accrued, absolute, contingent, matured, unmatured or otherwise, and whether or
not required to be recorded or reflected on a balance sheet under generally
accepted accounting principles in the U.S.);

 

(d)          on the Petition Date, the Debtor shall have not less than
$215,000.00 of unencumbered cash to which the Debtor holds exclusive title in a
bank account in the exclusive control of the Debtor and to which its authorized
agents, solely in their capacity as such, are the sole signatories;

 

(e)          it has no preferred stock outstanding other than 2,591,257 shares
of the Preferred Stock;

 

 10 

 

 

(f)          other than the Preferred Stock and Warrant/Option Agreements
disclosed to 210 by the Agreement Effective Date, which Warrant/Option
Agreements cover 368,765 unexercised warrants relating to the Debtor’s Common
Stock and 6,114 options relating to the Debtor’s Common Stock, there are no
other agreements—warrant, option or otherwise—that provide any party a right to
acquire any preferred stock or Common Stock of the Debtor;

 

(g)          it has no exemption outstanding under Article XV of its Sixth
Amended and Restated Certificate of Incorporation, except with respect to 210;

 

(h)          it has filed its annual report on Form 10-K for fiscal year 2016;

 

(i)          the execution, delivery, and performance of this Agreement does not
and shall not: (i) violate any provision of law, rules, or regulations
applicable to it or any of its subsidiaries in any material respect; (ii)
violate its certificate of incorporation, bylaws, or other organizational
documents or those of any of its subsidiaries; or (iii) conflict with, result in
a breach of, or constitute (with due notice or lapse of time or both) a default
under any contractual obligation to which it is a party, which conflict, breach,
or default would have a material adverse effect on the Restructuring; and

 

(j)          On July 31, 2017, the Debtor amended the employment agreements of
each of Mark Hood, Jennifer Crane and Richard K. Coleman, Jr. regarding their
continued employment in connection with the Restructuring (collectively, the
“Amended Employment Agreements”) and such Amended Employment Agreements have not
been further amended or terminated.

 

Section 5.  Mutual Representations, Warranties, and Covenants.

 

Each of the Parties, severally and not jointly, represents, warrants, and
covenants to each of the other Parties:

 

5.01.       Enforceability. This Agreement is a legal, valid, and binding
obligation of such Party, enforceable against it in accordance with its terms,
except as enforcement may be limited by applicable laws relating to or limiting
creditors’ rights generally or by equitable principles relating to
enforceability. To the extent such Party is an entity, it is validly existing
and in good standing under the laws of the state of its organization.

 

5.02.       No Consent or Approval. Except as expressly provided in this
Agreement, the Plan, the SPA, or the Bankruptcy Code, no consent or approval is
required by any other person or entity in order for it to effectuate the
Restructuring contemplated by, and perform the respective obligations under,
this Agreement.

 

5.03.       Power and Authority. To the extent such Party is an entity, and
except as expressly provided in this Agreement, it has all requisite corporate
or other power and authority to enter into, execute, and deliver this Agreement
and to effectuate the Restructuring contemplated by, and perform its respective
obligations under, this Agreement.

 

5.04.       Governmental Consents. Except as expressly set forth herein and with
respect to the Debtor’s performance of this Agreement (and subject to necessary
Bankruptcy Court approval and/or regulatory approvals associated with the
Restructuring), the execution, delivery and performance by it of this Agreement
does not, and shall not, require any registration or filing with consent or
approval of, or notice to, or other action to, with or by, any federal, state,
or other governmental authority or regulatory body.

 

 11 

 

 

5.05.       Mutual Cooperation. The Parties shall use commercially reasonable
efforts to effectuate the Restructuring prior to September 15, 2017.

 

Section 6.  Acknowledgement.

 

Notwithstanding any other provision herein, this Agreement is not and shall not
be deemed to be an offer with respect to any securities or solicitation of votes
for the acceptance of a plan of reorganization for purposes of sections 1125 and
1126 of the Bankruptcy Code or otherwise. Any such offer or solicitation will be
made only in compliance with all applicable securities laws and provisions of
the Bankruptcy Code.

 

Section 7.  Termination Events.

 

7.01.       210 Termination Events.

 

(a)          This Agreement may be terminated by 210 by the delivery to the
Debtor of a written notice in accordance with Section 9.09 hereof, upon the
occurrence and continuation of any of the following events:

 

(i)          the breach by the Debtor of any material provision or any of the
representations, warranties, covenants or obligations of the Debtor as set forth
in this Agreement or the occurrence of any event that would render any of the
Debtor’s representations or warranties in Section 4.06 untrue; provided,
however, (A) that promptly after becoming aware of the facts surrounding a
breach of this Agreement, 210 shall transmit a notice to the Debtor pursuant to
Section 9.09 hereof, detailing any such breach and (B) if such breach is capable
of being cured, the Debtor shall have fifteen (15) business days after receiving
such notice to cure any breach;

 

(ii)         the issuance by any governmental authority, including any
regulatory authority or court of competent jurisdiction, of any injunction,
judgment, decree, charge, ruling, or order enjoining the consummation of a
material portion of the Restructuring; provided, however, that the Debtor shall
have thirty (30) business days after issuance of such injunction, judgment,
decree, charge, ruling, or order to obtain relief that would allow consummation
of the Restructuring that (A) does not prevent or diminish in a material way
compliance with the terms of this Agreement or (B) is otherwise reasonably
acceptable to 210;

 

(iii)        an examiner (with expanded powers beyond those set forth in section
1106(a)(3) and (4) of the Bankruptcy Code), trustee or receiver shall have been
appointed in the Chapter 11 Case;

 

(iv)        the Debtor files any motion or pleading with the Bankruptcy Court
that is materially inconsistent with this Agreement and such motion or pleading
has not been withdrawn within five (5) days of receipt of notice that such
motion or pleading is inconsistent with this Agreement;

 

 12 

 

 

(v)         the entry of a ruling or order by the Bankruptcy Court that would
prevent consummation of the Restructuring; provided, however, that the Debtor
shall have thirty (30) days after issuance of such ruling or order to obtain
relief that would (A) remedy any such impediment to the Restructuring in a
manner that does not prevent or diminish in a material way compliance with the
terms of this Agreement or (B) is otherwise acceptable to 210;

 

(vi)        the conversion or dismissal of the Chapter 11 Case, unless such
conversion or dismissal, as applicable, is made with the prior written consent
of counsel to 210;

 

(vii)       the filing of a motion by the Debtor seeking an order or entry of an
order by the Bankruptcy Court terminating the Debtor’s exclusive right to file a
plan of reorganization under section 1121 of the Bankruptcy Code;

 

(viii)      the Debtor amends or modifies, or files a pleading seeking authority
to amend or modify, the Definitive Documentation, unless such amendment or
modification is (A) consistent in all material respects with this Agreement or
(B) acceptable to 210;

 

(ix)         entry of an order by the Bankruptcy Court amending or modifying the
Definitive Documentation, unless such amendment or modification is (A)
consistent in all material respects with this Agreement or (B) acceptable to
210;

 

(x)          the Bankruptcy Court grants relief terminating, annulling, or
modifying the automatic stay (as set forth in section 362 of the Bankruptcy
Code) with regard to any material assets of the Debtor that would have a
material adverse effect on the Restructuring, without the consent of 210;

 

(xi)         the Debtor shall fail to meet any of the Milestones as set forth in
Section 4.01(a)(iv), (ix) or (xi);

 

(xii)        the Debtor shall fail to receive acceptances of the Plan from the
holders of at least two-thirds (2/3) in amount of the Preferred Shares no later
than the Solicitation Deadline;

 

(xiii)       the Bankruptcy Court denies the motion seeking entry of the RSA
Assumption Order;

 

(xiv)      Liabilities on the Plan Effective Date (other than payroll and
payments due pursuant to or in connection with the Plan or the Chapter 11 Case)
exceed the sum of $50,000.00;

 

(xv)       the Debtor has entered into a material executory contract, lease, or
other arrangement outside of the ordinary course of its business without
obtaining the prior written consent of 210;

 

(xvi)      the Bankruptcy Court enters an order denying confirmation of the
Plan;

 

(xvii)     the Debtor’s board of directors withdraws its recommendation for or
approval of the Restructuring;

 

 13 

 

 

(xviii)    the Bankruptcy Court enters any order, including a plan confirmation
order, that alters any provision of the SPA;

 

(xix)       the determination by 210, in its sole discretion, that either (A)
the consummation of the Plan will result in an “ownership change” (as defined in
Section 382 of the Internal Revenue Code of 1986, as amended (the “Tax Code”))
to which Section 382(a) of the Tax Code applies, or (B) the Debtor has otherwise
had (at any time) an “ownership change” to which Section 382(a) of the Tax Code
applies; or

 

(xx)        the Bankruptcy Court denies the motion seeking entry of the
Warrant/Option Rejection Order.

 

(b)          210 may, in its sole and absolute discretion, waive any of the
termination events set forth in Section 7.01(a)(i)–(xx).

 

(c)          210 may terminate this Agreement for a reason other than
specifically set forth above and, in such event, 210 shall pay the Debtor a
liquidated damage amount of $100,000.00 to the Debtor within three (3) business
after the effective date of such termination, which liquidated damages shall be
full and final compensation for any and all claims of the Debtor against 210
related to the subject matter hereof.

 

7.02.       Debtor’s Termination Events.

 

(a)          The Debtor may terminate this Agreement upon ten (10) business
days’ prior written notice, delivered in accordance with Section 9.09 hereof,
upon the occurrence of any of the following events:

 

(i)          the breach by 210 of any material provision set forth in this
Agreement that remains uncured for a period of fifteen (15) business days after
the receipt by 210 of notice of such breach; or

 

(ii)         the issuance by any governmental authority, including any
regulatory authority or court of competent jurisdiction, of any final,
non-appealable ruling or order enjoining the consummation of a material portion
of the Restructuring.

 

(b)          If the Debtor determines, on the advice of counsel, that it is in
the best interest of the Debtor and its estate to terminate this Agreement to
pursue an alternative transaction, the Debtor may terminate this Agreement ten
(10) days after providing 210 notice in writing of its intent to terminate the
Agreement to pursue an alternative transaction with a bona fide third party;
provided that 210 shall be given a right of first refusal to match the terms of
any such alternative transaction.

 

7.03.       Consenting Preferred Shareholder Termination Events. A Consenting
Preferred Shareholder may terminate its Joinder Agreement if the Definitive
Documentation (including the Plan) is altered in a manner that provides a
recovery to Preferred Shareholders less favorable than the treatment set forth
in Section 4.01(b)(iv)(D) if such alteration is not cured by the fifteenth
(15th) day after written notice thereof is given by such Consenting Preferred
Shareholder to the Debtor and 210; provided that such Consenting Preferred
Shareholder may not terminate its Joinder Agreement pursuant to this Section
7.03 if it is in material breach of this Agreement.

 

 14 

 

 

7.04.       Mutual Termination. This Agreement, and the obligations of all
Parties hereunder, may be terminated by mutual agreement of the Debtor and 210.

 

7.05.       Termination Upon Completion of the Restructuring. This Agreement
shall terminate automatically without any further required action or notice on
the Plan Effective Date.

 

7.06.       Effect of Termination.

 

(a)          No Party may terminate this Agreement if such Party failed to
perform or comply in all material respects with the terms and conditions of this
Agreement, with such failure to perform or comply causing, or resulting in, the
occurrence of one or more termination events specified herein. The date on which
termination of this Agreement as to a Party is effective in accordance with
Section 7.01, 7.02, 7.03, 7.04 or 7.05 shall be referred to as a “Termination
Date”.

 

(b)          Except as set forth below, upon the occurrence of a Termination
Date as to a Party, this Agreement shall be of no further force and effect and
each Party subject to such termination shall be released from its commitments,
undertakings, and agreements under or related to this Agreement and shall have
the rights and remedies that it would have had if it had it not entered into
this Agreement, and shall be entitled to take all actions, whether with respect
to the Restructuring or otherwise, that it would have been entitled to take had
it not entered into this Agreement. Upon the occurrence of a Termination Date,
any and all consents tendered by the Parties subject to such termination before
a Termination Date shall be deemed, for all purposes, to be null and void from
the first instance and shall not be considered or otherwise used in any manner
by the Parties in connection with the Restructuring and this Agreement or
otherwise. Notwithstanding anything to the contrary in this Agreement, the
foregoing shall not be construed to prohibit the Parties from contesting whether
any such termination is in accordance with its terms or to seek enforcement of
any rights under this Agreement that arose or existed before a Termination Date.
Except as expressly provided in this Agreement, nothing herein is intended to,
or does, in any manner waive, limit, impair, or restrict (i) any right of the
Debtor or the ability of the Debtor to protect and preserve its rights
(including rights under this Agreement), remedies, and interests, including its
claims against 210, and (ii) any right of 210, or the ability of 210 to protect
and preserve its rights (including rights under this Agreement), remedies, and
interests, including its claims against the Debtor.

 

(c)          Notwithstanding anything to the contrary in this Agreement, (i) the
provisions of Section 7.06 (Effect of Termination) and Section 9 (Miscellaneous)
shall survive any such termination, and (ii) no termination of this Agreement
shall relieve any Party from liability for any breach of this Agreement
occurring prior to such termination, or for the breach of any provision hereof
that expressly survives the termination of this Agreement.

 

(d)          If the Agreement is terminated:

 

(i)          by 210 pursuant to any of Sections 7.01(a)(xi),

 

 15 

 

 

(ii)         by 210 pursuant to Section 7.01(a)(xi) based on Debtor’s failure to
satisfy any of the covenants in any of Sections 4.01(a)(xi) or after the Debtor
determines to pursue an alternative transaction as described in Section
4.01(a)(xi), or

 

(iii)        by the Debtor pursuant to Section 7.02(b),

 

then, within thirty (30) days of the date that the termination of the Agreement
shall become effective or, if later, December 31, 2017, the Debtor shall pay 210
a combined break-up fee and expense reimbursement in the amount of $500,000.00
(the “Break-up Fee”), which shall constitute a liquidated obligation of the
Debtor and, if the Chapter 11 Case has been filed, 210 shall, without the need
for further action by the Debtor or 210, have an allowed administrative expense
priority claim in the Chapter 11 Case pursuant to sections 503(b)(1) and
507(a)(2) of the Bankruptcy Code senior to other administrative claims, without
the need for 210 to file any motion or application with the Bankruptcy Court;
provided that 210 shall be entitled to file any such motion, application, or
other pleading with the Bankruptcy Court seeking the entry of an order
confirming the status of the administrative expense priority claim that in its
sole discretion it determines to be in its best interest.

 

Section 8.  Amendments.

 

Neither this Agreement nor any of the Definitive Documentation, may be modified,
amended, or supplemented without prior written consent of the Debtor and 210.

 

Section 9.  Miscellaneous.

 

9.01.       Further Assurances. Subject to the other terms of this Agreement,
the Parties agree to execute and deliver such other instruments and perform such
acts, in addition to the matters herein specified, as may be reasonably
appropriate or necessary, or as may be required by order of the Bankruptcy
Court, from time to time, to effectuate the Restructuring, as applicable.

 

9.02.       Complete Agreement. This Agreement shall not be effective or binding
as to any of the Parties unless and until it is signed by the Debtor. Upon being
signed by the Debtor and 210, this Agreement constitutes the entire agreement
between the Parties with respect to the subject matter hereof and supersedes all
prior agreements, oral, or written, among the Parties (including that certain
Non-Binding Term Sheet, dated as of August 3, 2017, between the Debtor and 210)
with respect thereto.

 

9.03.       Headings. The headings of all sections of this Agreement are
inserted solely for the convenience of reference and are not a part of and are
not intended to govern, limit, or aid in the construction or interpretation of
any term or provision hereof.

 

 16 

 

 

9.04.       GOVERNING LAW; SUBMISSION TO JURISDICTION; SELECTION OF FORUM. THIS
AGREEMENT IS TO BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
DELAWARE APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN SUCH STATE, WITHOUT
GIVING EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF. Each Party hereto
agrees that it shall bring any action or proceeding in respect of any claim
arising out of or related to this Agreement, to the extent possible, in the
United States District Court for the Western District of Texas (the “Chosen
Court”), and solely in connection with claims arising under this Agreement (a)
irrevocably submits to the exclusive jurisdiction of the Chosen Court; (b)
waives any objection to laying venue in any such action or proceeding in the
Chosen Court; and (c) waives any objection that the Chosen Court is an
inconvenient forum or does not have jurisdiction over any Party hereto;
provided, however, that if the Debtor commences the Chapter 11 Case, then the
Bankruptcy Court (or court of proper appellate jurisdiction) shall be the
exclusive Chosen Court.

 

9.05.       Trial by Jury Waiver. EACH PARTY HERETO IRREVOCABLY WAIVES ANY AND
ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

9.06.       Execution of Agreement. This Agreement may be executed and delivered
in any number of counterparts and by way of electronic signature and delivery,
each such counterpart, when executed and delivered, shall be deemed an original,
and all of which together shall constitute the same agreement. Except as
expressly provided in this Agreement, each individual executing this Agreement
on behalf of a Party has been duly authorized and empowered to execute and
deliver this Agreement on behalf of said Party.

 

9.07.         Interpretation and Rules of Construction. This Agreement is the
product of negotiations among the Parties, and in the enforcement or
interpretation hereof, is to be interpreted in a neutral manner, and any
presumption with regard to interpretation for or against any Party by reason of
that Party having drafted or caused to be drafted this Agreement, or any portion
hereof, shall not be effective in regard to the interpretation hereof. The
Parties were each represented by counsel during the negotiations and drafting of
this Agreement and continue to be represented by counsel. In addition, this
Agreement shall be interpreted in accordance with section 102 of the Bankruptcy
Code.

 

9.08.       Successors and Assigns. This Agreement is intended to bind and inure
to the benefit of the Parties and their respective successors and permitted
assigns, as applicable. There are no third-party beneficiaries under this
Agreement, and the rights or obligations of any Party under this Agreement may
not be assigned, delegated, or transferred to any other person or entity.

 

9.09.       Notices. All notices hereunder shall be deemed given if in writing
and delivered, if sent by electronic mail, courier, or registered or certified
mail (return receipt requested), to the following addresses (or at such other
addresses as shall be specified by like notice):

 

(a)if to the Debtor, to:

 

WeWork

c/o Crossroads Systems, Inc.

11801 Domain Blvd., 3rd Floor

Austin, Texas 78758

Telephone: (512) 928-7335

Attention: Richard K. Coleman, Jr.

 

 17 

 

 

with a copy to:

 

Eric Terry Law, PLLC

4040 Broadway Street

Suite 350

San Antonio, Texas 78209

Attention: Eric Terry, Esq.

eric@ericterrylaw.com

 

and a copy to:

 

Olshan Frome Wolosky LLP

1325 Avenue of the Americas

New York, New York 10019

Telephone: (212) 451-2289

Attention: Adam W. Finerman, Esq.

 

(b)if to 210, to:

 

210/CRDS Investment LLC

8214 Westchester Drive, Suite 950

Dallas, Texas 75225

Attention: Caryn Peeples

caryn@atlascap.net

 

with a copy to:

 

Gibson, Dunn & Crutcher, LLP

2100 McKinney Avenue

Suite 1100

Dallas, Texas 75201

Attention: David L. Sinak, Esq.

DSinak@gibsondunn.com

 

or such other address as may have been furnished by a Party to the other Party
by notice given in accordance with the requirements set forth above. Any notice
given by delivery, mail, or courier shall be effective when received.

 

9.10.       Access. The Debtor shall provide 210 and its respective attorneys,
consultants, accountants, and other authorized representatives (each, an “Access
Party”) reasonable access, upon reasonable notice during normal business hours,
to relevant properties, books, contracts, commitments, records, management
personnel, lenders, and advisors of the Debtor; provided, however, that the
Debtor’s obligation hereunder shall be conditioned upon agreeing to maintain the
confidentiality of any information received in connection with the foregoing,
other than any such information that is available to such Access Party on a
non-confidential basis (the “Information”), except that Information may be
disclosed (a) to such Access Party’s affiliates and the partners, directors,
officers, employees, service providers, agents and advisors of such Access Party
and of such Access Party’s affiliates on a “need to know” basis solely in
connection with the transactions contemplated hereby, (b) to the extent
requested by any regulatory authority purporting to have jurisdiction over such
Access Party or its affiliates, (c) to the extent required by applicable law,
(d) to any of the Parties, or (e) with the consent of the Debtor. The Debtor
shall take actions reasonably requested by 210 to ensure that the Debtor has
satisfied its duty to inquire and determine its shareholders as required by
Treasury Regulation § 1.382-2T(k)(3).

 

 18 

 

 

9.11.       Waiver. Except as expressly provided herein, if the Restructuring is
not consummated, or if this Agreement is terminated for any reason, the Parties
fully reserve any and all of their rights.

 

9.12.       Specific Performance. It is understood and agreed by the Parties
that, except as provided in Section 7.01(c), money damages would be an
insufficient remedy for any breach of this Agreement by any Party and each
non-breaching Party shall be entitled to specific performance and injunctive or
other equitable relief (without the posting of any bond and without proof of
actual damages) as a remedy for any such breach, including an order of the
Bankruptcy Court or other court of competent jurisdiction requiring any Party to
comply promptly with any of its obligations hereunder.

 

9.13.       Automatic Stay. 210 is authorized to take any steps necessary to
effectuate the termination of this Agreement, notwithstanding section 362 of the
Bankruptcy Code or any other applicable law, and no cure period contained in
this Agreement shall be extended pursuant to sections 108 or 365 of the
Bankruptcy Code or any other applicable law without the prior written consent of
210.

 

9.14.       Several, Not Joint, Claims. The agreements, representations,
warranties, and obligations of the Parties under this Agreement are, in all
respects, several and not joint.

 

9.15.       Severability. If any provision of this Agreement shall be held by a
court of competent jurisdiction to be illegal, invalid, or unenforceable, the
remaining provisions shall remain in full force and effect if essential terms
and conditions of this Agreement for each Party remain valid, binding, and
enforceable.

 

9.16.       Confidentiality. From and after the Agreement Effective Date until
the earlier of (a) the Solicitation Commencement Date or (b) December 31, 2017,
without the prior written consent of the other Parties hereto, no Party shall
disclose to any person (other than its officers, directors, managers, employees,
agents or financial or other advisors that need to know, so long as such persons
are bound by similar confidentiality provisions as set forth herein) any
information relating to this Agreement (including the existence thereof), the
terms and conditions of this Agreement, or the discussions or negotiations with
respect to the transactions contemplated hereby or the status thereof. If any
Party determines that it is required by law to disclose any such information, it
will, to the extent reasonably practicable, consult with each other Party
regarding such disclosure or filing and seek confidential treatment for such
portions of the disclosure.

 

9.17.       Remedies Cumulative. All rights, powers, and remedies provided under
this Agreement or otherwise available in respect hereof at law or in equity
shall be cumulative and not alternative, and the exercise of any right, power,
or remedy thereof by any Party shall not preclude the simultaneous or later
exercise of any other such right, power, or remedy by such Party.

 

 19 

 

 

IN WITNESS WHEREOF, the Parties have executed this Agreement on the day and year
first above written.

 

[Remainder of page intentionally left blank.]

 

 20 

 

 

  CROSSROADS SYSTEMS, INC.           By: /s/ Richard K. Coleman, Jr.     Name:
Richard K. Coleman, Jr.     Title: Executive Director

 

[Debtor Signature Page to the Restructuring Support Agreement]

 

 

 

 

  210/CRDS INVESTMENT LLC           By: 210 Capital, LLC, its sole member      
    By: /s/ Robert Alpert     Name: Robert Alpert     Title: Authorized
Representative

 

[210 Signature Page to the Restructuring Support Agreement]

 

 

 

  

EXHIBIT A

 

FORM OF JOINDER

 

 

 

 

FORM OF JOINDER AGREEMENT

 

The undersigned (“Joining Party”) hereby (i) acknowledges that it has read and
understands that certain Restructuring Support Agreement (the “Agreement”),
dated as of [l], 2017, by and among (A) Crossroads Systems, Inc., a Delaware
corporation (the “Debtor”), (B) 210/CRDS Investment LLC, a Texas limited
liability company (“210”) and (C) the Consenting Preferred Shareholders (as
defined in the Agreement); and (ii) agrees to be bound by the terms and
conditions thereof to the extent and in the same manner as if the Joining Party
was a Consenting Preferred Shareholder thereunder, and shall be deemed a
Consenting Preferred Shareholder and a Party under the terms of the Agreement.
Capitalized terms used and not otherwise defined herein shall have the meanings
set forth in the Agreement. All notices and other communications to the Joining
Party given or made pursuant to the Agreement shall be sent to the address
indicated in the below signature block.

 

Date Executed: [DATE], [PLACE]

 

  [JOINING PARTY NAME]         By:     Name:  [NAME]   Title:  [TITLE]      
Notice Address for Joining Party:       [JOINING PARTY NAME]   [ADDRESS]  
Attn:  [NAME]   Facsimile:  [FAX NUMBER]   Email:  [EMAIL ADDRESS]

 

 

 

 

EXHIBIT B

 

FORM OF SPA

 

 

 

 

CROSSROADS SYSTEMS, INC.

 

SECURITIES PURCHASE AGREEMENT

 

This SECURITIES PURCHASE AGREEMENT (this “Agreement”), dated as of [_______],
2017, is made by and between Crossroads Systems, Inc., a corporation organized
under the laws of the State of Delaware (the “Company”), and 210/CRDS Investment
LLC, a Texas limited liability company (the “Purchaser”).

 

RECITALS

 

WHEREAS, subject to the terms and conditions hereof, the Company desires to sell
to the Purchaser and the Purchaser desires to purchase from the Company,
1,427,314 newly issued shares (the “Common Shares”) of the Company’s common
stock, par value $0.001 per share (the “Common Stock”), at a total aggregate
cash purchase price of $4,000,000.00 (the “Purchase Price”);

 

WHEREAS, within forty-five (45) days following the date hereof, the Company and
the Purchaser desire to enter into a Loan Agreement (“Loan Agreement”) and
Promissory Note, whereby upon the Company fulfilling certain conditions and at
the Company’s option, the Purchaser may advance one or more loans to the
Company, with the terms of such loans more fully set forth in such Loan
Agreement and Promissory Note, forms of which are attached hereto as Exhibit A
(the “Loan Documents”);

 

WHEREAS, the transactions contemplated hereby will be made in reliance upon
exemptions from the registration requirements of the Securities Act of 1933, as
amended (the “Securities Act”), pursuant to Section 2(a)(2) thereof and Rule 506
of Regulation D thereunder;

 

WHEREAS, in connection with the transactions contemplated hereby, the Company
desires to provide the Purchaser with certain registration rights under the
Securities Act and the rules and regulations promulgated thereunder pursuant to
a Registration Rights Agreement, a form of which is attached hereto as Exhibit B
(the “Registration Rights Agreement”);

 

WHEREAS, in connection with the transactions contemplated hereby, the Company
desires to enter into an indemnification agreement with each of the New
Directors (as defined herein), a form of which is attached hereto as Exhibit C
(the “Indemnification Agreements”);

 

WHEREAS, in connection with the transactions contemplated hereby, on July 31,
2017 the Company entered into amended severance agreements with each of Mark
Hood and Jennifer Crane and an amended employment agreement with Richard K.
Coleman, Jr. (the “Employee Agreement Amendments”);

 

WHEREAS, in connection with the transactions contemplated hereby, the Board of
Directors of the Company has adopted resolutions granting its approval to the
transactions contemplated by this Agreement and the other Transaction Documents
pursuant to Section 15.3(B) of the Company’s certificate of incorporation, as
amended (the “Waiver,” and collectively with the Loan Documents, the
Registration Rights Agreement, the Indemnification Agreements and the Employee
Agreement Amendments, as they may be amended from time to time, the “Transaction
Documents”).

 

NOW, THEREFORE, in consideration of the premises and mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Company and the Purchaser hereby agree as
follows:

 

 

 

 

ARTICLE I

PURCHASE AND SALE OF COMMON STOCK

 

Section 1.01.         Purchase and Sale of Common Stock. Subject to the terms
and conditions of this Agreement, the Company shall issue and sell to the
Purchaser, and the Purchaser shall purchase from the Company, the Common Shares
for the Purchase Price on the Closing Date (as defined herein).

 

Section 1.02.         Closing. The closing of the purchase and sale of the
Common Stock will take place on the date that each of the conditions set forth
in Section 1.04 have been satisfied or waived by the Purchaser and the Company,
as applicable, or such date thereafter as shall be mutually agreed by the
Purchaser and Company (the “Closing Date”).

 

Section 1.03.         Closing Deliverables. On or prior to the Closing Date, the
Company shall deliver or cause to be delivered to the Purchaser each of
following:

 

(a)a copy of this Agreement that has been duly executed by the Company;

 

(b)a copy of irrevocable instructions to American Stock Transfer & Trust
Company, LLC instructing American Stock Transfer & Trust Company, LLC to deliver
a stock certificate evidencing the Common Shares;

 

(c)a copy of the Registration Rights Agreement that has been duly executed by
the Company;

 

(d)copies of the Indemnification Agreements for each of the New Directors that
have been duly executed by the Company;

 

(e)copies of the Employee Agreement Amendments that have been duly executed by
the Company and Richard K. Coleman, Jr., Mark Hood and Jennifer Crane, as
applicable;

 

(f)a copy of the Waiver duly adopted by the Company’s Board of Directors;

 

(g)evidence that all members of the Company’s Board of Directors other than
Robert G. Pearse and Richard K. Coleman, Jr. have voluntarily resigned, and such
Board of Directors is comprised of the persons set forth in the first sentence
of Section 3.02(a) herein; and

 

(h)such other documents contemplated by this Agreement or reasonably requested
by the Purchaser, including, without limitation, evidence of certain matters in
connection with the confirmation of the Chapter 11 Case (as defined herein).

 

On or prior to the Closing Date, the Purchaser shall deliver or cause to be
delivered to the Company each of the following:

 

(a)the Purchase Price by wire transfer of immediately available funds to an
account specified by the Company;

 

(b)a copy of this Agreement that has been duly executed by the Purchaser;

 

(c)a copy of the Registration Rights Agreement that has been duly executed by
the Purchaser; and

 

(d)copies of the Indemnification Agreements for each of the New Directors that
have been duly executed by each of the New Directors.

 

 

 

 

Section 1.04.         Conditions Precedent to Purchase and Sale of Common
Shares. The obligation of the Company to sell the Common Shares to the Purchaser
and execute the Transaction Documents on the Closing Date (except for the
Employee Agreement Amendments, which were executed on July 31, 2017) is subject
to the satisfaction or waiver of the following conditions precedent:

 

(a)the Purchaser shall have delivered each of the items required to be delivered
by the Purchaser pursuant to Section 1.03;

 

(b)the representations and warranties of the Purchaser contained in Section 2.02
shall be true and correct in all material respects on and as of the date hereof
and the Closing Date; and

 

(c)the Company shall have received the Purchase Price.

 

The obligation of the Purchaser to purchase the Common Shares from the Company
and execute the Transaction Documents on the Closing Date (except for the
Employee Agreement Amendments, which were executed on July 31, 2017) is subject
to the satisfaction or waiver of the following conditions precedent:

 

(a)the Company shall have delivered each of the items required to be delivered
by the Company pursuant to Section 1.03;

 

(b)the representations and warranties of the Company contained in Section 2.01
shall be true and correct in all material respects on and as of the date hereof
and the Closing Date;

 

(c)the Company shall have complied with all covenants contained in Article 3 of
this Agreement and in the other Transaction Documents;

 

(d)no event or circumstance that could reasonably be expected to have a Material
Adverse Effect (as defined herein) shall have occurred since the date of this
Agreement;

 

(e)no Default or Event of Default (each as defined in the Loan Documents) shall
have occurred and be continuing;

 

(f)the capital stock owned by Lone Star Value Investors, LP (“Lone Star”) shall
have been distributed by Lone Star to its respective direct or indirect equity
owners, none of whom shall be a “5% shareholder” of the Company for purposes of
Section 382 of the Tax Code, and Lone Star, in compliance with permitted
guidelines, shall have provided sufficient information to the Company to
classify its equity owners for purposes of Section 382 of the Tax Code;

 

(g)entry of a final and non-appealable order by the bankruptcy court having
jurisdiction over the Company’s reorganization under chapter 11 of title 11 of
the United States Code, 11. U.S.C. §§ 101-1532 (the “Chapter 11 Case”)
confirming the Company’s prepackaged chapter 11 plan of reorganization (the
“Plan”), which order and plan shall in all respects be satisfactory to
Purchaser;

 

(h)all conditions precedent to the effective date of the Plan (as such term is
defined in the Plan), other than the purchase of the Common Shares as provided
herein, shall have occurred, and such purchase shall result in the occurrence of
the effective date of the Plan;

 

(i)the Company shall have taken such action as necessary to fulfill the
conditions set forth in Section 3.02;

 

 

 

 

(j)the Company shall have a directors’ and officers’ liability insurance plan
providing coverage for the New Directors on terms and conditions satisfactory to
the Purchaser;

 

(k)the Company shall have amended its charter substantially in the form attached
hereto as Exhibit D which shall, among other things, prohibit the issuance of
non-voting equity securities, to the extent required under section 1123(a)(6) of
the Bankruptcy Code;

 

(l)all consents, approvals and waivers required for the consummation of the
transactions contemplated by this Agreement shall have been obtained (including,
for the avoidance of doubt, the Waiver);

 

(m)the Company shall not have any consents, approvals or waivers outstanding
under Section 15.3(B) of the Company’s certificate of incorporation, as amended,
or any other provision of the Company’s certificate of incorporation, as
amended, that would permit (i) with respect to any stockholder which owns less
than 4.99% of the Common Stock of the Company on an as-converted basis, such
stockholder to own 4.99% or more of the Common Stock of the Company on an
as-converted basis, and (ii) with respect to any stockholder which owns 4.99% or
more of the Common Stock of the Company on an as-converted basis, such
stockholder to acquire any more shares of capital stock of the Company, except
for the consents, approvals and waivers granted to the Purchaser pursuant to the
terms of this Agreement and the Transaction Documents;

 

(n)no statute, rule, regulation, executive order, decree, ruling, injunction,
action or proceeding shall have been enacted, entered, promulgated or endorsed
by any court or governmental authority of competent jurisdiction or any
self-regulatory organization having authority over the matters contemplated
hereby which questions the validity of, challenges or prohibits the consummation
of, any of the transactions contemplated by this Agreement;

 

(o)except for the pending patent litigation disclosed in the SEC Documents,
there is no ongoing or pending, or, to the Company’s knowledge, threatened,
action, suit, proceeding, inquiry or investigation before or by any court,
public board, government agency, self-regulatory organization or body
(including, without limitation, the SEC) pending or affecting the Company or any
of its respective directors or officers in their capacities as such, other than
the Chapter 11 Case;

 

(p)the Company shall have cancelled all of its outstanding stock options and the
Company shall not have any outstanding warrants, options, convertible debt or
other rights to acquire Company stock; and

 

(q)the Company has not had an “ownership change” (as defined in Section 382 of
the Tax Code) to which Section 382(a) of the Tax Code applies, at any time.

 

ARTICLE II

REPRESENTATIONS AND WARRANTIES

 

Section 2.01.         Company Representations and Warranties. The Company
represents and warrants to the Purchaser as of the date hereof that, as of the
Closing Date, except as set forth in a Schedule of Exceptions, attached as
Schedule A (the “Schedule of Exceptions”), the statements in the following
subsections of this Section 2.01 are true and correct:

 

 

 

 

(a)          Organization and Good Standing. The Company (i) is duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization, (ii) has the power and authority, and the legal right, to make,
deliver and perform this Agreement and the Transaction Documents and (iii) has
taken all necessary corporate or other action, including obtaining any necessary
approvals by the Company’s Board of Directors and stockholders, to authorize the
execution, delivery and performance of this Agreement and the Transaction
Documents. Except as set forth in the Schedule of Exceptions, the Company does
not have any subsidiaries, and the Company does not own, directly or indirectly,
any capital stock of, or other equity or voting interests in, any entity. The
Company is duly qualified as a foreign corporation to do business and is in good
standing in every jurisdiction in which the nature of the business conducted or
property owned by it makes such qualification necessary.

 

(b)          Authorization and Enforceability. This Agreement and each of the
Transaction Documents (i) have been duly executed and delivered on behalf of the
Company and (ii) constitute a legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with their terms.

 

(c)          Capitalization.  The capitalization of the Company, including the
authorized capital stock, the number of shares issued and outstanding, the
number of shares issuable and reserved for issuance pursuant to the Company’s
stock option plans, and the number of shares issuable and reserved for issuance
pursuant to securities exercisable or exchangeable for, or convertible into, any
shares of capital stock is as follows:

 

·As of the Effective Date (as defined in the Company’s chapter 11 plan of
reorganization), the authorized capital stock consists of:

 

o100,000,000 shares of capital stock authorized for issuance, consisting of:

 

§75,000,000 shares of Common Stock; and

 

§25,000,000 shares of Preferred Stock, with 4,500,000 of such shares of
preferred stock designated as the 5.0% Series F Convertible Preferred Stock (of
which 3,750,000 shares are designated as “Sub-Series F-1” and 750,000 shares are
designated as “Sub-Series F-2”) and 500,000 of such shares of preferred stock
designated as the Series G Participating Preferred Stock.

 

·Immediately prior to the Effective Date, the issued and outstanding shares of
capital stock consisted of:

 

o1,225,472 shares of Common Stock outstanding (excluding treasury stock); and

 

o2,591,257 shares of 5.0% Series F Convertible Preferred Stock outstanding.

 

 

 

 

All of such outstanding shares of capital stock have been, or upon issuance in
accordance with the terms of any such exercisable, exchangeable or convertible
securities will be, validly issued, fully paid and non-assessable.  Other than
as set forth in this Agreement and the Transaction Documents, no shares of
capital stock of the Company are subject to preemptive rights or any other
similar rights of the stockholders of the Company or any liens or
encumbrances.  Except for the Common Shares issuable pursuant to this Agreement,
and except as described in this Section 2.01(c), (i) there are no outstanding
options, warrants, scrip, rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities or rights convertible into or
exercisable or exchangeable for, any shares of capital stock of the Company, or
arrangements by which the Company is or may become bound to issue additional
shares of capital stock of the Company, nor are any such issuances or
arrangements contemplated, (ii) there are no agreements or arrangements under
which the Company is obligated to register the sale of any of its securities
under the Securities Act (except for the Registration Rights Agreement); (iii)
there are no outstanding securities or instruments of the Company which contain
any redemption or similar provisions, and there are no contracts, commitments,
understandings or arrangements by which the Company is or may become bound to
redeem any security of the Company; and (iv) the Company does not have any
shareholder rights plan, “poison pill” or other anti-takeover plans or similar
arrangements (except Article XV of the Company’s certificate of
incorporation). There are no securities or instruments issued by the Company
that contain anti-dilution or similar provisions that will be triggered by, and
all of the resulting adjustments that will be made to such securities and
instruments as a result of, the issuance of the Common Stock in accordance with
the terms of this Agreement and the Transaction Documents, if applicable.  The
Company has no knowledge of any voting agreements, buy-sell agreements, option
or right of first purchase agreements or other agreements of any kind among any
of the security holders of the Company relating to the securities of the Company
held by them.  The Company has no restricted stock units outstanding.

 

(d)          Issuance of Common Stock.  The Common Stock to be issued and sold
pursuant to this Agreement and the Transaction Documents are or will be duly
authorized and, upon issuance in accordance with the terms of this Agreement and
the Transaction Documents, (i) will be validly issued and free from all taxes,
liens, claims and encumbrances (other than restrictions on transfer contained in
this Agreement or the Transaction Documents, as applicable), (ii) will not be
subject to preemptive rights, rights of first refusal or other similar rights of
stockholders of the Company or any other person (other than preemptive rights,
rights of first refusal or other similar rights contained in this Agreement or
the Transaction Documents, as applicable) and (iii) will not impose personal
liability on the holder thereof.  Except for the filing of any notice prior or
subsequent to the date hereof or the Closing Date, as applicable, that may be
required under applicable state and/or federal securities laws (or comparable
laws of any other jurisdiction) or the Registration Rights Agreement, no
authorization, consent, approval, license, exemption of or filing or
registration with any court or governmental department, commission, board,
bureau, agency, instrumentality or other third party, is or will be necessary
for, or in connection with, the execution and delivery by the Company of this
Agreement or the Transaction Documents, for the offer, issue, sale, execution or
delivery of the Common Stock, or for the performance by the Company of its
obligations under this Agreement or the Transaction Documents.  No “bad actor”
disqualifying event described in Rule 506(d)(1)(i)-(viii) of the Securities Act
(a “Disqualification Event”) is applicable to the Company or, to the Company’s
knowledge, any person listed in the first paragraph of Rule 506(d)(1), except
for a Disqualification Event as to which Rule 506(d)(2)(ii–iv) or (d)(3), is
applicable.

 

(e)          No Conflicts.  The execution, delivery and performance of this
Agreement and the Transaction Documents by the Company and the consummation by
the Company of the transactions contemplated hereby and thereby (including,
without limitation, the issuance of the Common Stock) will not (i) result in a
violation of the organizational documents of the Company, (ii) materially
conflict with, or constitute a material default (or an event that with notice or
lapse of time or both would become a default) under, or give to others any
material rights of termination, amendment, acceleration or cancellation of, any
agreement, indenture or instrument to which the Company is a party, (iii) result
in a material violation of any law, rule, regulation, order, judgment or decree
(including United States federal and state securities laws, rules and
regulations and rules and regulations of any self-regulatory organizations to
which either the Company or its securities are subject) applicable to the
Company or by which any property or asset of the Company is bound or affected,
or (iv) result in the imposition of a mortgage, pledge, security interest,
encumbrance, charge or other lien on any asset of the Company.

 

 

 

 

(f)           Compliance.  The Company is not in violation of its organizational
documents and, except as described in the Schedule of Exceptions, the Company is
not in default (and no event has occurred that with notice or lapse of time or
both would put the Company in default) under, nor has there occurred any event
giving others (with notice or lapse of time or both) any rights of termination,
amendment, acceleration or cancellation of, any agreement, indenture or
instrument to which the Company is a party.  The business of the Company is not
being conducted, and shall not be conducted so long as the Purchaser (or any of
its respective affiliates) own any of the Common Stock, in violation of any law,
ordinance or regulation of any governmental entity.  Neither the Company nor any
director, officer, agent, employee or other person acting on behalf of the
Company has, in the course of his actions for, or on behalf of, the Company,
used any corporate funds for any unlawful contribution, gift, entertainment or
other unlawful expenses relating to political activity, made any direct or
indirect unlawful payment to any foreign or domestic government official or
employee from corporate funds, violated or is in violation of any provision of
the U.S. Foreign Corrupt Practices Act of 1977, or made any bribe, rebate,
payoff, influence payment, kickback or other unlawful payment to any foreign or
domestic government official or employee. Neither the Company nor any director,
officer, agent, employee or other person acting on behalf of the Company is: (a)
a person or entity that appears on the Specially Designated Nationals and
Blocked Persons List maintained by the Office of Foreign Assets Control of the
U.S. Department of the Treasury (“OFAC”); or (b) a person, country or entity
with whom a U.S. person (as defined by the laws and regulations administered by
OFAC, 31 C.F.R. Parts 500-598 (the “OFAC Regulations”)) or a person subject to
the jurisdiction of the United States (as defined by the OFAC Regulations) is
otherwise prohibited from dealing under the OFAC Regulations (a “Sanctions
Target”). The Company is not, directly or indirectly, owned or controlled by, or
under common control with, or, to the knowledge of Company, acting for the
benefit of or on behalf of, any Sanctions Target. The Company has not exported
or re-exported any goods, commodities, technology or software in any manner that
violates any applicable national or international export control statute,
executive order, regulation, rule or sanction, including the OFAC Regulations,
the United States Export Administration Regulations, 15 C.F.R. Parts 730-774,
the International Traffic in Arms Regulations, 22 C.F.R. Part 120 et seq., the
Export Administration Act, the International Emergency Economic Powers Act, the
Trading with the Enemy Act, the Iran Sanctions Act, the Comprehensive Iran
Sanctions, Accountability, and Divestment Act, the Trade Sanctions Reform and
Export Enhancement Act of 2000 (TSRA), or any OFAC Sanctions Program. The
Company possesses all certificates, authorizations and permits issued by the
appropriate federal, state, provincial or foreign regulatory authorities that
are material to the conduct to its business, and the Company has not received
any notice of proceeding relating to the revocation or modification of any such
certificate, authorization or permit.  The Company has complied with and is not
in default or violation in any material respect of, and is not, to the Company’s
knowledge, under investigation with respect to or has not been, to the knowledge
of the Company, threatened to be charged with or given notice of any violation
of, any applicable federal, state, local or foreign law, statute, ordinance,
license, rule, regulation, policy or guideline, order, demand, writ, injunction,
decree or judgment of any federal, state, local or foreign governmental or
regulatory authority.  Except for statutory or regulatory restrictions of
general application, no federal, state, local or foreign governmental or
regulatory authority has placed any material restriction on the business or
properties of the Company.

 

(g)          [Intentionally omitted].

 

(h)          [Intentionally omitted].

 

 

 

 

(i)          SEC Documents, Financial Statements. Prior to the date of this
Agreement, the Company has timely filed (within applicable extension periods)
all reports, schedules, forms, statements and other documents required to be
filed by it with the United States Securities and Exchange Commission (the
“SEC”) pursuant to the reporting requirements of the Securities Exchange Act of
1934, as amended (the “Exchange Act”) (all of the foregoing filed prior to the
date hereof and all exhibits included therein and financial statements and
schedules thereto and documents incorporated by reference therein, the “SEC
Documents”). As of their respective dates, the SEC Documents complied in all
material respects with the requirements of the Exchange Act or the Securities
Act, as the case may be, and the rules and regulations of the SEC promulgated
thereunder applicable to the SEC Documents, and none of the SEC Documents, at
the time they were filed with the SEC, contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.  None of the
statements made in any such SEC Documents is, or has been, required to be
amended or updated under applicable law (except for such statements as have been
amended or updated in subsequent filings made prior to the date hereof).  As of
their respective dates, the financial statements of the Company included in the
SEC Documents complied as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC
applicable with respect thereto.  Such financial statements have been prepared
in accordance with U.S. generally accepted accounting principles (“GAAP”),
consistently applied, during the periods involved (except as may be otherwise
indicated in such financial statements or the notes thereto or, in the case of
unaudited interim statements, to the extent they may not include footnotes or
may be condensed or summary statements) and fairly present in all material
respects the consolidated financial position of the Company and its consolidated
subsidiaries in existence as of the dates thereof and the consolidated results
of their operations and cash flows for the periods then ended (subject, in the
case of unaudited statements, to immaterial year-end audit adjustments).

 

(j)           Absence of Certain Changes.  Since April 30, 2017, other than as
described in the SEC Documents or the Schedule of Exceptions, (i) there has not
been any change in the capital stock or long-term debt of the Company, or any
dividend or distribution of any kind declared, set aside for payment, paid or
made by the Company on any class of capital stock; (ii) the Company has not
entered into any transaction or agreement that is material to the Company taken
as a whole or incurred any liability or obligation, direct or contingent, that
is material to the Company and, except as contemplated by this Agreement or the
Transaction Documents, has not made any material change or amendment to a
material contract or arrangement by which the Company or any of its assets or
properties is bound or subject; (iii) the Company has not sustained any material
loss or interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor disturbance or
dispute or any action, order or decree of any court or arbitrator or
governmental or regulatory authority; and (iv) there has been no material
adverse change and no material adverse development in the business, properties,
operations, prospects, financial condition or results of operations of the
Company.

 

(k)          Transactions With Affiliates.  Except as described in the SEC
Documents or the Schedule of Exceptions, none of the officers, directors, or
employees of the Company is presently a party to any transaction with the
Company (other than for ordinary course services solely in their capacity as
officers, directors or employees), including, without limitation, any contract,
agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any such officer, director or employee or any
corporation, partnership, trust or other entity in which any such officer,
director, or employee has an ownership interest of five percent or more or is an
officer, director, trustee or partner, other than as contemplated by the
Employee Agreement Amendments.

 

(l)           Absence of Litigation.  Except as disclosed in the SEC Documents,
there is no ongoing or pending, or, to the Company’s knowledge, threatened,
action, suit, proceeding, inquiry or investigation before or by any court,
public board, government agency, self-regulatory organization or body
(including, without limitation, the SEC) pending or affecting the Company or any
of its respective directors or officers in their capacities as such.  To the
knowledge of the Company, there are no actions, suits, proceedings, inquiries or
investigations before or by any court, public board, government agency,
self-regulatory organization or body (including, without limitation, the SEC)
threatened against the Company or any of its respective directors or officers in
their capacities as such.  There are no facts which, if known by a potential
claimant or governmental authority, could give rise to a claim or proceeding
which, if asserted or conducted with results unfavorable to the Company, could
reasonably be expected to have a Material Adverse Effect. For purposes of this
Agreement, “Material Adverse Effect” means any material adverse effect on (i)
the Common Stock, (ii) the ability of the Company to perform its obligations
under this Agreement or the Transaction Documents, (iii) the operations,
performance, business, properties, prospects, condition (financial or otherwise)
or results of operations of the Company or (iv) a material adverse effect upon
the legality, validity, binding effect or enforceability against the Company of
any provision of this Agreement or any Transaction Document.

 

 

 

 

(m)          Intellectual Property.  The Company, directly or indirectly as a
limited partner of KIP CR P1 LP, a Delaware limited partnership, owns or
possesses all rights or licenses to the patents set forth on Annex A hereto. To
the knowledge of the Company, the Company has not infringed any trademark, trade
name rights, patents, patent rights, copyrights, inventions, licenses, service
names, service marks, service mark registrations, trade secret or other similar
rights of others, and, to the knowledge of the Company, there is no claim,
action or proceeding being made or brought against, or to the Company’s
knowledge, being threatened against, the Company regarding trademark, trade
name, patents, patent rights, invention, copyright, license, service names,
service marks, service mark registrations, trade secret or other infringement;
and the Company is unaware of any facts or circumstances which might give rise
to any of the foregoing.

 

(n)          Real Estate; Liens.  The Company does not own any real
property.  The Company has good title to its assets, and its assets are free and
clear of liens, except Permitted Liens (as defined in the Loan Agreement).

 

(o)          Tax Status. Except as described in the Schedule of Exceptions, the
Company and each of its current and former subsidiaries has made or filed all
material foreign, U.S. federal, state, provincial and local income and all other
tax returns, reports and declarations required by any jurisdiction to which it
is or was subject (unless and only to the extent that the Company or such former
subsidiaries have set aside on its books provisions reasonably adequate for the
payment of all unpaid and unreported taxes) and each such return report and
declaration is true, correct and complete. The Company and each of its current
and former subsidiaries has paid all taxes and other governmental assessments
and charges shown or determined to be due on such returns, reports and
declarations, except those being contested in good faith and has set aside on
its books provisions reasonably adequate for the payment of all taxes for
periods subsequent to the periods to which such returns, reports or declarations
apply. There are no unpaid taxes in any material amount claimed to be due by the
taxing authority of any jurisdiction, and the officers of the Company know of no
basis for any such claim.  The Company has not executed a waiver with respect to
any statute of limitations relating to the assessment or collection of any
foreign, federal, state, provincial or local tax. None of the Company’s tax
returns is presently being audited by any taxing authority.

 

(p)          Key Employees.  None of the Company’s officers is, or is now
expected to be, in violation of any material term of any employment contract,
confidentiality, disclosure or proprietary information agreement,
non-competition agreement, or any other contract or agreement or any restrictive
covenant, and the continued employment of each officer does not subject the
Company to any material liability with respect to any of the foregoing
matters.  Except as otherwise expressly contemplated by this Agreement, no
officer has, to the knowledge of the Company, any intention to terminate or
limit his or her employment with, or services to, the Company, nor is any such
officer subject to any constraints which would cause such person to be unable to
devote his or her business and professional time and attention to such
employment or services consistent with past practice.

 

(q)          Employee Relations.  No application or petition for certification
of a collective bargaining agent is pending and none of the current or former
employees of Company are or have been represented by any union or other
bargaining representative and no union has attempted to organize any group of
the Company’s employees, and no group of the Company’s current or former
employees has sought to organize themselves into a union or similar organization
for the purpose of collective bargaining. (i) The Company believes that its
relations with its employees are good; (ii) no executive officer (as defined in
Rule 501(f) of the Securities Act) has notified the Company that such officer
intends to leave the Company or otherwise terminate such officer’s employment
with the Company except as contemplated by the Transaction Documents; and (iii)
the Company is in compliance with all federal, state and local laws and
regulations and, to the Company’s knowledge, all foreign laws and regulations,
in each case respecting employment and employment practices, terms and
conditions of employment and wages and hours, except where failure to be in
compliance would not, either individually or in the aggregate, result in a
Material Adverse Effect.

 

 

 

 

(r)           Insurance.  The Company has in force fire, casualty, product
liability and other insurance policies, with extended coverage, sufficient in
amount to allow it to replace any of its material properties or assets which
might be damaged or destroyed or sufficient to cover liabilities to which the
Company may reasonably become subject, and such types and amounts of other
insurance with respect to its business and properties, on both a per occurrence
and an aggregate basis, as are customarily carried by persons engaged in the
same or similar business as the Company.  No default or event has occurred that
could give rise to a default or termination under any such policy.

 

(s)          Environmental Matters.  The Company is in compliance with all
foreign, federal, state and local rules, laws and regulations relating to the
use, treatment, storage and disposal of Hazardous Substances and protection of
health and safety or the environment which are applicable to its
business.  There is no environmental litigation or other environmental
proceeding pending or threatened by any governmental regulatory authority or
others with respect to the current or any former business of the Company or any
partnership or joint venture currently or at any time affiliated with the
Company.  No state of facts exists as to environmental matters or Hazardous
Substances (as defined below) that involves the reasonable likelihood of a
material capital expenditure by the Company.  No Hazardous Substances have been
treated, stored or disposed of, or otherwise deposited, in or on the properties
owned or leased by the Company or by any partnership or joint venture currently
or at any time affiliated with the Company in violation of any applicable
environmental laws.  The environmental compliance programs of the Company comply
in all respects with all environmental laws, whether foreign, federal, state,
provincial or local, currently in effect.  For purposes of this Agreement,
“Hazardous Substances” means any substance, waste, contaminant, pollutant or
material that has been determined by any governmental authority to be capable of
posing a risk of injury to health, safety, property or the environment.

 

(t)           No General Solicitation or Integrated Offering.  Neither the
Company nor any person acting for the Company has conducted any “general
solicitation” (as such term is defined in Regulation D) with respect to the
Common Stock being offered hereby.  Neither the Company nor any of its
affiliates, nor any person acting on its or their behalf, has directly or
indirectly made any offers or sales of any security or solicited any offers to
buy any security under circumstances that would require registration of the
Common Stock being offered hereby under the Securities Act or cause this
offering of the Common Stock to be integrated with any prior offering of
securities of the Company for purposes of the Securities Act, which result of
such integration would require registration under the Securities Act, or any
applicable stockholder approval provisions.

 

(u)          No Brokers.  The Company has taken no action that would give rise
to any claim by any person for brokerage commissions, finder’s fees or similar
payments by any Purchaser relating to this Agreement, the Transaction Documents
or the transactions contemplated hereby or thereby.

 

(v)          Internal Control over Financial Reporting.  The Company maintains a
system of internal control over financial reporting (as such term is defined in
Rule 13a-15(f) of the Exchange Act) that complies with the requirements of the
Exchange Act and has been designed by the Company’s principal executive officer
and principal financial officer, or under their supervision, to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
GAAP.  The Company does not have any material weaknesses in its internal control
over financial reporting.  Since the date of the latest audited financial
statements included in the SEC Documents, there has been no change in the
Company’s internal control over financial reporting that has materially
affected, or is reasonably likely to materially affect, the Company’s internal
control over financial reporting.

 

 

 

 

(w)          Disclosure.  All information relating to or concerning the Company
set forth in this Agreement and the Transaction Documents or provided to the
Purchaser hereunder or thereunder or otherwise by the Company in connection with
the transactions contemplated hereby is true and correct in all material
respects and the Company has not omitted to state any material fact necessary in
order to make the statements made herein or therein, in light of the
circumstances under which they were made, not misleading.  No event or
circumstance has occurred or exists with respect to the Company or its business,
properties, prospects, operations or financial condition, which has not been
publicly disclosed but, under applicable law, rule or regulation, would be
required to be disclosed by the Company in a registration statement filed on the
date hereof by the Company under the Securities Act with respect to a primary
issuance of the Company’s securities.

 

(x)          Antitakeover Matters.  The Board of Directors of the Company has
taken and will take all actions necessary to ensure that the restrictions
applicable to business combinations contained in the DGCL are, and will be,
inapplicable to the execution, delivery and performance by the Company of this
Agreement and the Transaction Documents and the consummation of the transactions
contemplated hereby and thereby. The Board of Directors of the Company has taken
and will take all actions necessary to exempt the consummation of the
transactions contemplated by this Agreement and the Transaction Documents under
the Company’s certificate of incorporation, as amended, including, without
limitation, the adoption of the Waiver.

 

Section 2.02.         Purchaser Representations and Warranties. The Purchaser
represents and warrants as of the date hereof, and as of the Closing Date, to
the Company:

 

(a)          Purchase for Own Account, Etc.  The Purchaser is purchasing the
Common Stock offered hereby for the Purchaser’s own account for investment
purposes only and not with a view towards the public sale or distribution
thereof, except pursuant to sales that are exempt from the registration
requirements of the Securities Act and/or sales registered under the Securities
Act. The Purchaser is capable of evaluating the merits and risks of its
investment in the Company. The Purchaser understands that it must bear the
economic risk of this investment indefinitely, unless the Common Stock purchased
hereby is registered pursuant to the Securities Act and any applicable state
securities or blue sky laws or an exemption from such registration is available,
and that the Company has no present intention of registering the resale of any
such Common Stock other than as contemplated by the Registration Rights
Agreement.  Notwithstanding anything in this Section 2.02(a) to the contrary, by
making the representations herein, the Purchaser does not agree to hold any
Common Stock purchased hereby for any minimum or other specific term and
reserves the right to dispose of any such Common Sock at any time in accordance
with or pursuant to a registration statement or an exemption from the
registration requirements under the Securities Act.

 

(b)          Accredited Investor Status.  The Purchaser is an “Accredited
Investor,” as that term is defined in Rule 501(a) of Regulation D promulgated
under the Securities Act.

 

(c)          Reliance on Exemptions.  The Purchaser understands that the Common
Stock being offered hereby is being offered and sold to the Purchaser in
reliance upon specific exemptions from the registration requirements of United
States federal and state securities laws, and that the Company is relying upon
the truth and accuracy of, and the Purchaser’s compliance with, the
representations, warranties, agreements, acknowledgments and understandings of
the Purchaser set forth herein in order to determine the availability of such
exemptions and the eligibility of the Purchaser to acquire such Common Stock.

 

(d)          Governmental Review.  The Purchaser understands that no United
States federal or state agency or any other government or governmental agency
has passed upon or made any recommendation or endorsement of the Common Stock
offered hereby.

 

 

 

 

(e)          Transfer or Resale.  The Purchaser understands that (i) except as
provided in the Registration Rights Agreement, the sale or resale of the Common
Stock offered hereby has not been and is not being registered under the
Securities Act or any state securities laws, and such Common Stock may not be
transferred unless (A) the transfer is made pursuant to and as set forth in an
effective registration statement under the Securities Act covering such
securities; (B) the Common Stock to be sold or transferred may be sold or
transferred pursuant to an exemption from such registration; (C) the Common
Stock to be sold or transferred may be sold under and in compliance with Rule
144 promulgated under the Securities Act (including any successor rule, “Rule
144”); or (D) the Common Stock to be sold or transferred may be sold or
transferred to an affiliate of the Purchaser that agrees to sell or otherwise
transfer the Common Stock only in accordance with the provisions of this Section
2.02(e) and that is an Accredited Investor; and (ii) neither the Company nor any
other person is under any obligation to register such Common Stock under the
Securities Act or any state securities laws (other than pursuant to the terms of
the Registration Rights Agreement).  Notwithstanding the foregoing or anything
else contained herein to the contrary, the Common Stock offered hereby may be
pledged as collateral in connection with a bona fide margin account or other
lending arrangement, provided such pledge is consistent with applicable laws,
rules and regulations.

 

(f)          No Disqualification Events. Neither (i) the Purchaser, (ii) any of
its directors, executive officers, other officers that may serve as a director
or officer of any company in which it invests, general partners or managing
members, nor (iii) any beneficial owner of the Company’s voting equity
securities (in accordance with Rule 506(d) of the Securities Act) held by the
Purchaser is subject to any Disqualification Event, except for Disqualification
Events covered by Rule 506(d)(2)(ii) or (iii) or (d)(3) under the Securities Act
and disclosed reasonably in advance of the Closing in writing in reasonable
detail to the Company.

 

(g)          Legends.  The Purchaser understands that the certificates and
instruments evidencing the Common Stock will bear a restrictive legend in
substantially the following form:

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE OF
THE UNITED STATES OR IN ANY OTHER JURISDICTION.  THE SECURITIES REPRESENTED
HEREBY MAY NOT BE OFFERED, SOLD OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER APPLICABLE SECURITIES LAWS
UNLESS OFFERED, SOLD OR TRANSFERRED PURSUANT TO AN AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THOSE LAWS.

 

The legend set forth above shall be removed and the Company shall issue a
certificate without such legend to the holder of any Common Stock upon which it
is stamped, if, unless otherwise required by state securities laws, (i) the sale
of such Common Stock is registered under the Securities Act (including
registration pursuant to Rule 416 thereunder) or (ii) such holder provides the
Company with an opinion of counsel stating that a public or private sale or
transfer of such Common Stock may be made without registration under the
Securities Act.  In the event the above legend is removed from any certificate
evidencing the Common Stock due to the declaration of effectiveness of a
registration statement covering the resale of such Common Stock and thereafter
the effectiveness of such registration statement is suspended or the Company
determines that a supplement or amendment thereto is required by applicable
securities laws, then, upon reasonable advance written notice to the Purchaser,
the Company may require that the above legend be placed on any certificate
evidencing such Common Stock that cannot then be sold pursuant to an effective
registration statement and the Purchaser shall cooperate in the replacement of
such legend.  Such legend shall thereafter be removed when such Common Stock may
again be sold pursuant to an effective registration statement.

 

 

 

 

(h)          Authorization; Enforcement.  This Agreement and the Transaction
Documents to which the Purchaser is a party have been duly and validly
authorized, executed and delivered on behalf of the Purchaser and are valid and
binding agreements of the Purchaser enforceable against the Purchaser in
accordance with their terms, except as such enforceability may be limited by
general principles of equity or applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally, the enforcement of creditors’ rights and remedies.

 

ARTICLE III

COVENANTS

 

Section 3.01.         Right of First Offer.  As long as the Purchaser (or any of
its affiliates) holds any shares of the Company’s capital stock, the Purchaser
(or such affiliate) shall have a pro rata right, based on the Purchaser’s (or
such affiliate’s) percentage of issued and outstanding Common Stock held, to
participate in subsequent securities offerings, issuances or sales undertaken by
the Company (excluding the issuance or award of Common Stock, stock options or
other equity awards under the Company’s employee benefit plans as in effect on
the date hereof). Upon a proposal to undertake such an offering, issuance or
sale by the Company, the Company shall provide the Purchaser with written notice
of such proposal, stating (i) its intention to offer, issue or sell such
securities, (ii) the number, class and terms of the securities to be offered and
(iii) the price and terms upon which the Company plans to offer, sell or issue
such securities. Within thirty days after receipt of such notice, the Purchaser
may, in its sole discretion, deliver written notice to the Company electing to
participate in such offering, issuance or sale.

 

Section 3.02.         Board of Director Designees.

 

(a)          The Company’s Board of Directors shall take all actions necessary
such that, on or before the Closing Date, the Company’s Board of Directors shall
consist of five (5) members, with two (2) of the members consisting of Robert G.
Pearse and Richard K. Coleman, Jr. (the “Continuing Directors”), two (2) of the
members being designated by the Purchaser, which shall initially be Robert H.
Alpert and C. Clark Webb (the “Purchaser Designees”), and one (1) additional
member being nominated and approved by a majority of the Continuing Directors
and Purchaser Designees, which director shall be an “independent” director as
defined by NASDAQ rules, which shall initially be [________] (the “Independent
Director,” and together with the Purchaser Designees, the “New Directors”). Each
of the New Directors shall stand for re-election at the next annual meeting of
stockholders.

 

(b)          For so long as the Purchaser (or any of its affiliates) holds any
shares of the Company’s capital stock, the Purchaser Designees (including any
successor pursuant to Section 3.02(c) below) shall be nominated by the Board of
Directors of the Company (or a committee thereof) for election at the annual
meeting of stockholders at which the Purchaser Designees’ terms will expire.  At
least ninety (90) days prior to any such annual meeting at or by which directors
are to be elected, the Purchaser shall notify the Company in writing of the
Purchaser Designees to be nominated for election as directors.  The Company
shall disclose in its proxy statement, if a proxy statement is required to be
filed, the nominated Purchaser Designees.  In the absence of any such
notification, it shall be presumed that the Purchaser’s then incumbent Purchaser
Designees have been designated.

 

(c)          If a Purchaser Designee shall cease to serve as a director for any
reason, the Company’s Board of Directors shall appoint and elect a replacement
director designated by the Purchaser to serve out the remaining term of the
existing director.

 

(d)          The Company shall enter into the Indemnification Agreements and
provide directors’ and officers’ liability insurance on terms and conditions
satisfactory to the Purchaser with respect to each of the New Directors prior to
the commencement of each New Director’s service on the Board of Directors.

 

 

 

 

(e)          The Company’s Board of Directors shall take all actions necessary
to waive the appointment of the New Directors from constituting a change of
control under any of its outstanding agreements and to prevent the appointment
of the New Directors from causing the accelerated vesting of any awards for or
rights to shares of the Common Stock or the payment of or the acceleration of
payment of any change in control, severance, bonus or other cash payments or
issuance of the Common Stock.

 

Section 3.03.         Form D;  Blue Sky Laws.  The Company shall timely file
with the SEC one or more Form Ds with respect to the Common Stock offered hereby
as required under Regulation D and provide a copy thereof to the Purchaser
promptly after such filing.  The Company shall, on or before the date hereof and
the Closing Date, take such action as the Company shall reasonably determine is
necessary to qualify the Common Stock offered hereby for sale to the Purchaser
pursuant to this Agreement and the Transaction Documents under applicable
securities or “blue sky” laws of the states of the United States or obtain
exemption therefrom, and shall provide evidence of any such action so taken to
the Purchaser on or prior to the date hereof and the Closing Date. Within four
business days after the date hereof, the Company shall file a press release
concerning this Agreement, the Transaction Documents and the transactions
contemplated hereby and thereby.

 

Section 3.04.         Use of Proceeds.  The Company shall use the proceeds from
the sale and issuance of the Common Stock only for general corporate purposes
and working capital.

 

Section 3.05.         No Integrated Offerings.  The Company shall not make any
offers or sales of any security (other than the Common Stock offered hereby)
under circumstances that would require registration of the Common Stock being
offered or sold hereunder under the Securities Act or cause this offering of
such Common Stock to be integrated with any other offering of securities by the
Company.

 

Section 3.06.         Inspection Rights. For so long as the Purchaser (or any of
its affiliates) holds any shares of capital stock of the Company, the Company
shall permit, during normal business hours and upon reasonable request and
reasonable notice, the Purchaser (or such affiliate) or any employees, agents or
representatives thereof, for purposes reasonably related to the Purchaser’s (or
such affiliate’s) interests as a stockholder, to examine and make reasonable
copies of and extracts from the records and books of account of, and visit and
inspect the properties, assets, operations and business of the Company, and to
discuss the affairs, finances and accounts of the Company with any of its
officers, consultants, directors, and key employees.

 

Section 3.07.         Company Operating Plan. From and after the Closing Date,
the Company agrees to work together with the Purchaser to develop a plan to
maximize long-term stockholder value, including, among other things, the
monetization of the Company’s patents and the acquisition of additional
profitable companies.

 

Section 3.08.         Incorporation of Covenants from Loan Agreement. The
covenants of Sections 5 and 6 of the Loan Agreement are hereby incorporated
herein by reference, mutatis mutandis.

 

ARTICLE IV

GOVERNING LAW; INDEMNIFICATION; MISCELLANEOUS

 

Section 4.01.         Governing Law; Jurisdiction.  Matters relating solely to
corporate law under this Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware. All other matters, such as
the interpretation of the rights granted and the obligations of the parties
under this Agreement, shall be governed by and construed in accordance with the
laws of the State of Texas applicable to contracts made and to be performed in
the State of Texas.  The Company and the Purchaser irrevocably consent to the
exclusive jurisdiction of the United States federal courts and the state courts
located in the County of Dallas, State of Texas, in any suit or proceeding based
on or arising under this Agreement and irrevocably agree that all claims in
respect of such suit or proceeding may be determined in such courts. The Company
irrevocably waives the defense of an inconvenient forum to the maintenance of
such suit or proceeding. The Company further agrees that service of process upon
the Company mailed by first class mail shall be deemed in every respect
effective service of process upon the Company in any such suit or
proceeding.  Nothing herein shall affect the right of the Purchaser to serve
process in any other manner permitted by law.  The Company agrees that a final
non-appealable judgment in any such suit or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on such judgment or in any other
lawful manner.

 

 

 

 

Section 4.02.         Counterparts.  This Agreement may be executed in two or
more counterparts, all of which shall be considered one and the same agreement
and shall become effective when counterparts have been signed by each party and
delivered to the other party.  This Agreement, once executed by a party, may be
delivered to the other parties hereto by facsimile transmission or electronic
mail of a copy of this Agreement bearing the signature of the party so
delivering this Agreement.

 

Section 4.03.         Construction.  Whenever the context requires, the gender
of any word used in this Agreement includes the masculine, feminine or neuter,
and the number of any word includes the singular or plural.  Unless the context
otherwise requires, all references to articles and sections refer to articles
and sections of this Agreement, and all references to schedules are to schedules
attached hereto, each of which is made a part hereof for all purposes.  The
descriptive headings of the several articles and sections of this Agreement are
inserted for purposes of reference only, and shall not affect the meaning or
construction of any of the provisions hereof.

 

Section 4.04.         Severability.  If any provision of this Agreement shall be
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement or the validity or enforceability of this Agreement
in any other jurisdiction.

 

Section 4.05.         Entire Agreement; Amendments.  This Agreement, the
Transaction Documents, the Restructuring Support Agreement (as defined below)
and the plan of reorganization under the Chapter 11 Case (including any
schedules and exhibits hereto and thereto) contain the entire understanding of
the Purchaser, the Company, their affiliates and persons acting on their behalf
with respect to the matters covered herein and therein and, except as
specifically set forth herein or therein, neither the Company nor the Purchaser
make any representation, warranty, covenant or undertaking with respect to such
matters.  No provision of this Agreement may be waived other than by an
instrument in writing signed by the party to be charged with enforcement, and no
provision of this Agreement may be amended other than by an instrument in
writing signed by the Company and the Purchaser.

 

Section 4.06.         Notices.  Any notices required or permitted to be given
under the terms of this Agreement shall be sent by certified or registered mail
(return receipt requested) or delivered personally, by responsible overnight
carrier or by confirmed facsimile, and shall be effective five days after being
placed in the mail, if mailed, or upon receipt or refusal of receipt, if
delivered personally or by responsible overnight carrier or confirmed facsimile,
in each case addressed to a party.  The initial addresses for such
communications shall be as follows, and each party shall provide notice to the
other parties of any change in such party’s address:

 

(a)If to the Company:

 

WeWork c/o Crossroads Systems, Inc.

11801 Domaine Blvd., 3rd Floor

Austin, Texas 78758

Telephone: (512) 928-7335

Attention: Richard K. Coleman, Jr.

 

 

 

 

with a copy simultaneously transmitted by like means (which transmittal shall
not constitute notice hereunder) to:

 

Olshan Frome Wolosky LLP

1325 Avenue of the Americas

New York, New York 10019

Telephone: (212) 451-2289

Attention: Adam W. Finerman, Esq.

 

(b)If to the Purchaser:

 

210/CRDS Investment, LLC

8214 Westchester Drive, Suite 950

Dallas, Texas 75225

Telephone: (214) 999-6082

Attention: Caryn Peeples

 

with a copy simultaneously transmitted by like means (which transmittal shall
not constitute notice hereunder) to:

 

Gibson, Dunn & Crutcher LLP

2100 McKinney Avenue, Suite 1100

Dallas, Texas 75201

Telephone: (214) 698-3107

Attention: David L. Sinak

 

Section 4.07.         Successors and Assigns.  This Agreement shall be binding
upon and inure to the benefit of the parties and their successors and
assigns.  Except as provided herein, the Company shall not assign this Agreement
or any rights or obligations hereunder.  The Purchaser may assign or transfer
the Common Stock offered hereby pursuant to the terms of this Agreement and of
such Common Stock and applicable law.  The Purchaser may assign its rights
hereunder to any other person or entity without the Company’s consent.

 

Section 4.08.         Third Party Beneficiaries.  This Agreement is intended for
the benefit of the parties hereto and their respective permitted successors and
assigns, and is not for the benefit of, nor may any provision hereof be enforced
by, any other person.

 

Section 4.09.         Termination; Survival.  This Agreement may be terminated
and the transactions contemplated hereby may be abandoned at any time prior to
the Closing Date:

 

(a)by mutual consent of the Purchaser and the Company;

 

(b)by either the Purchaser or the Company if the Closing Date has not occurred
within 90 calendar days of the date of this Agreement;

 

(c)by the Purchaser (provided that the Purchaser is not then in breach of any
provision of this Agreement or any other Transaction Document) if a default or
material breach shall be made by the Company with respect to the due and timely
performance of any of its covenants or agreements contained herein, or if its
representations or warranties contained in this Agreement shall have become
inaccurate in a material respect, if such default, breach or inaccuracy has not
been cured or waived within two business days after written notice to the
Company specifying, in reasonable detail, such claimed default, breach or
inaccuracy and demanding its cure or satisfaction;

 

 

 

 

(d)by the Company (provided that the Company is not then in breach of any
provision of this Agreement or any other Transaction Document) if a default or
material breach shall be made by the Purchaser with respect to the due and
timely performance of any of its covenants or agreements contained herein, or if
its representations or warranties contained in this Agreement shall have become
inaccurate in a material respect, if such default, breach or inaccuracy has not
been cured or waived within two business days after written notice to such
Purchaser specifying, in reasonable detail, such claimed default, breach or
inaccuracy and demanding its cure or satisfaction;

 

(e)by either the Purchaser or the Company if the Restructuring Support
Agreement, dated as of August [___], 2017, by and between the Company and the
Purchaser (the “Restructuring Support Agreement”), is terminated in accordance
with its terms, then either party to this Agreement may terminate this
Agreement; provided that the applicable break-up fee has been paid as of the
termination date; or

 

(f)by the Purchaser if the Purchaser determines that either (i) the consummation
of the Company’s chapter 11 plan of reorganization will result in an “ownership
change” (as defined in Section 382 of the Internal Revenue Code of 1986, as
amended (the “Tax Code”) to which Section 382(a) of the Tax Code applies, or
(ii) the Company has otherwise had (at any time) an “ownership change” to which
Section 382(a) of the Tax Code applies.

 

The representations and warranties of the Company in Section 2.01 and the
agreements and covenants set forth in Sections 5 and 6 hereof shall survive the
termination of this Agreement notwithstanding any due diligence investigation
conducted by or on behalf of any Purchaser.  Moreover, none of the
representations and warranties made by the Company herein shall act as a waiver
of any rights or remedies any Purchaser may have under applicable U.S. federal
or state securities laws.

 

Section 4.10.         Further Assurances.  Each party shall do and perform, or
cause to be done and performed, all such further acts and things, and shall
execute and deliver all such other agreements, certificates, instruments and
documents, as the other party may reasonably request in order to carry out the
intent and accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.

 

Section 4.11.         Indemnification.  In consideration of the Purchaser’s
execution and delivery of this Agreement and the Transaction Documents and the
purchase of the Common Stock hereunder, and in addition to all of the Company’s
other obligations under this Agreement and the Transaction Documents, from and
after the date hereof, the Company shall defend, protect, indemnify and hold
harmless the Purchaser and all of its stockholders, partners, members, officers,
directors, employees and direct or indirect investors and any of the foregoing
persons’ agents or other representatives, including, without limitation, those
retained in connection with the transactions contemplated by this Agreement
(collectively, the “Indemnitees”), from and against any and all actions, causes
of action, suits, claims, losses, costs, penalties, fees, liabilities and
damages, and expenses in connection therewith (irrespective of whether any such
Indemnitee is a party to the action for which indemnification hereunder is
sought), and including reasonable attorneys’ fees and disbursements (the
“Indemnified Liabilities”), incurred by any Indemnitee as a result of, or
arising out of, or relating to (i) any misrepresentation or breach of any
representation or warranty made by the Company in this Agreement, the
Transaction Documents or any other certificate, instrument or document
contemplated hereby or thereby, (ii) any breach of any covenant, agreement or
obligation of the Company contained in this Agreement, the Transaction Documents
or any other certificate, instrument or document contemplated hereby or thereby
or (iii) any cause of action, suit or claim brought or made against such
Indemnitee by a third party (including for these purposes a derivative action
brought on behalf of the Company) and arising out of or resulting from (A) the
execution, delivery, performance or enforcement of this Agreement, any other
Transaction Document or any other certificate, instrument or document
contemplated hereby or thereby, or (B) the status of the Purchaser or holder of
the Common Stock as an investor in the Company. To the extent that the foregoing
undertaking by the Company may be unenforceable for any reason, the Company
shall make the maximum contribution to the payment and satisfaction of each of
the Indemnified Liabilities which is permissible under applicable law.

 

 

 

 

Section 4.12.         Joint Participation in Drafting.  Each party to this
Agreement has participated in the negotiation and drafting of this Agreement and
the Transaction Documents.  As such, the language used herein and therein shall
be deemed to be the language chosen by the parties hereto to express their
mutual intent, and no rule of strict construction will be applied against any
party to this Agreement.

 

Section 4.13.         Business Days.  For purposes of this Agreement, the term
“business day” means any day other than a Saturday or Sunday or a day on which
banking institutions in the State of Texas are authorized or obligated by law,
regulation or executive order to close.

 

[REMAINDER OF PAGE LEFT BLANK INTENTIONALLY]

 

 

 

 

IN WITNESS WHEREOF, the Company and the Purchaser have caused this Agreement to
be duly executed as of the date first written above.

 

  COMPANY:       CROSSROADS SYSTEMS, INC.       By:       Name:       Title:

 

  PURCHASER:       210/CRDS INVESTMENT, LLC   By: 210 Capital, LLC,     a
Delaware limited liability company,     as sole member           By:        
Robert H. Alpert       Manager             By:         C. Clark Webb      
Manager

 

Signature Page to Securities Purchase Agreement

 

 

 

 

SCHEDULE A

 

Schedule of Exceptions

 

Section 2.01(a) – Crossroads Systems (Texas), Inc., a Texas corporation, and
Crossroads Europe GmbH, a company organized under the laws of Germany, are both
subsidiaries of the Company. The Company has a 99% limited partnership interest
in KIP CR P1 LP, a Delaware limited partnership.

 

Section 2.01(j) – On June 30, 2017, the Company paid preferred dividends to the
holders of its 5% Series F Convertible Preferred stock. The Company accrues
dividends for the holders of its 5% Series F Convertible Preferred stock.

 

Section 2.01(o) – The Company has not filed its 2016 taxes on behalf of its
subsidiary, Crossroads Europe GmbH.

 

 

 

 

ANNEX A

 

Company Owned Patent Assets and Patent Assets Owned Indirectly through KIP CR P1
LP

 

[See attached.]

 

 

 

 

CROSSROADS PATENT STATUS

(August 2, 2017)

 

CROSS1120 U.S. PATENTS

 

Title: Storage Router and Method for Providing Virtual Local Storage
Inventor(s): Hoese, Geoffrey B.   Russell, Jeffrey T.

 

SIPLG (CRDS)
Reference No.  
Country   Application No.
Application Date   Patent No.
Issue Date   Priority No.
Priority Date  
Expiration Date  
Status/Remarks CROSS1120
(CSI0002)   US   09/001,799
12/31/97   5,941,972
08/24/99       12/31/17   Granted
11.5 Year Tax Paid 01/13/11 CROSS1120-1
(CSI0002.1)   US   09/354,682
07/15/99   6,421,753
07/16/02   09/001,799
12/31/97   12/31/17   Granted
11.5 Year Tax Paid:  01/14/14 CROSS1120-2
(CSI0002.2)   US   09/965,339
9/27/01   6,425,036
7/23/02   09/001,799
12/31/97   12/31/17   Granted
11.5 Year Tax Paid:  01/14/14 CROSS1120-3
(CSI0002.3)   US   09/965,335
9/27/01   6,425,035
7/23/02   09/001,799
12/31/97   12/31/17   Granted
11.5 Year Tax Paid:  01/14/14 CROSS1120-4
(CSI0002.4)
CROSS1120-11   US   10/023,786
12/18/01       09/001,799
12/31/97       Abandoned Per Client Instructions CROSS1120-5
(CSI0002.5)   US   10/081,110
2/22/02   6,789,152
09/07/04   09/001,799
12/31/97   12/31/17   Granted:
11.5 Year Tax Paid: 01/14/16 CROSS1120-6
(CSI0002.6)
CROSS1120-12   US   10/081,114
2/22/02       09/001,799
12/31/97       Abandoned Per Client Instructions CROSS1120-7
(CSI0002.7)   US   10/081,082
02/22/02       09/001,799
12/31/97       Abandoned per client instructions. CROSS1120-8
(CSI0002.8)   US   10/174,720
6/19/02   6,738,854
05/18/04   09/001,799
12/31/97   12/31/17   Granted:
11.5 Year Tax Paid: 09/23/15 CROSS1120-9
(CSI0002.9)   US   10/361,283
02/10/03   6,763,419
07/13/04   09/001,799
12/31/97   12/31/17   Granted:
11.5 Year Tax Paid 12/14/15 CROSS1120-10
(CSI0002.10)   US                   Unfiled CROSS1120-11   US   10/638,955
08/11/03       09/001,799
12/31/97       Abandoned.

 

 

 

 

SIPLG (CRDS)
Reference No.  
Country   Application No.
Application Date   Patent No.
Issue Date   Priority No.
Priority Date  
Expiration Date  
Status/Remarks CROSS1120-12   US   10/640,468
08/13/07       09/001,799
12/31/97       Abandoned. CROSS1120-13
(CSI0002.13)   US   10/658,163
09/09/03   7,051,147
05/23/06   09/001,799
12/31/97   12/31/17   Granted:
11.5 Year Tax Due: 11/23/17 CROSS1120-14
(CSI0002)
Re-Exam of CROSS1120   US   90/007,113
07/14/04       09/001,799
12/31/97       Granted:
04/25/06:  ExParte Reexam Cert. CROSS1121-15
(CSI0002.1)
Re-Exam of CROSS1120-1   US   90/007,124
07/14/04       09/001,799
12/31/97       Granted:
08/01/06:  ExParte Reexam Cert. CROSS1122-16
(CSI0002.2)
Re-Exam of CROSS1120-2   US   90/007,126
07/14/04       09/001,799
12/31/97       Granted:
05/02/06:  ExParte Reexam Cert. CROSS1123-17
CROSS1123-19
(CSI0002.3)
Re-Exams of CROSS1120-3   US   90/007,125
07/14/04
90/007,317
11/23/04       09/001,799
12/31/97       Granted:
08/08/06 ExParte Reexam Cert.

CROSS1128-18
(CSI0002.8)
Re-Exam of CROSS1120-8   US   90/007,127
07/14/04       09/001,799
12/31/97       Granted:
06/13/06: Ex Parte Rexam Cert. CROSS1123-19   US   90/007,317
11/23/04       09/001,799
12/31/97       Granted:
Combined with CROSS1123-17. CROSS1120-20
Cont. of CROSS1120-13   US   11/191,254
07/27/05       09/001,799
12/31/97       Abandoned per client instr. CROSS1120-21
(CSI0002.13)
Cont. of CROSS1120-13   US   11/353,826
02/14/06   7,340,549
03/04/08   09/001,799
12/31/97   12/31/17   Granted:
7.5 Year Tax Due: 09/04/15 CROSS1120-22
(CSI0002.22)
Cont. to
CROSS1120-21   US   11/442,878
05/30/06       09/001,799
12/31/97       Closed per client instr.

 

 

 

 

SIPLG (CRDS)
Reference No.  
Country   Application No.
Application Date   Patent No.
Issue Date   Priority No.
Priority Date  
Expiration Date  
Status/Remarks CROSS1120-23
(CSI0002.23)   US   11/851,724
09/07/07   7,689,754
03/30/10   09/001,799
12/31/97   12/31/17   Granted:
7.5 Year Tax Due: 09/30/17 CROSS1120-24
(CSI0002.24)   US   11/851,775
09/07/07   7,552,266
06/23/09   09/001,799
12/31/97   12/31/17   Granted:
7.5 Year Tax Paid:  12/15/16 CROSS1120-25
(CSI0002.25)   US   11/851,837
09/07/07   7,694,058
04/06/10   09/001,799
12/31/97   12/31/17   Granted:
7.5 Year Tax Due:  10/06/17 CROSS1120-26
(CSI0002.26)   US   11/980,909
10/31/07   8,046,515
10/25/11   09/001,799
12/31/97   12/31/17   Granted:
3.5 Year Tax Paid: 04/01/15 CROSS1120-27
(CSI0002.27)   US   11/947,499
11/29/07   7,984,221
07/19/11   09/001,799
12/31/97   12/31/17   Granted:
3.5 Year Tax Paid: 01/05/15 CROSS1120-28
(CSI0002.28)   US   12/220,431
07/24/08   US RE42,761
12/27/11   09/001,799
12/31/97   12/13/17   Granted:
Reissue of CROSS1120-21 CROSS1120-29
(CSI0002.29)   US   12/552,807
09/02/09   7,937,517
05/03/11   09/001,799
12/31/97   12/31/17   Granted:
3.5 Year Tax Paid: 11/03/14 CROSS1120-30
(CSI0002.30)   US   12/552,885
09/02/09   7,934,040
04/26/11   09/001,799
12/31/97   12/31/17   Granted:
3.5 Year Tax Paid: 10/21/14 CROSS1120-32
(CSI0002.32)   US   12/552,913
09/02/09   8,015,339
09/06/11   09/001,799
12/31/97   12/31/17   Granted:
3.5 Year Tax Paid: 03/13/15 CROSS1120-33
(CSI0002.33)   US   12/690,592
01/20/10   7,934,041
04/26/11   09/001,799
12/31/97   12/31/17   Granted:
3.5 Year Tax Paid: 10/21/14 CROSS1120-34
(CSI002.34)   US   12/910,431
10/22/10   7,984,224
07/19/11   09/001,799
12/31/97   12/13/17   Granted:
3.5 Year Tax Paid: 01/05/15 CROSS1120-35
(CSI002.35)   US   12/910,375
10/22/10   8,028,117
09/27/11   09/001,799
12/31/97   12/13/17   Granted:
3.5 Year Tax Paid: 03/06/15 CROSS1120-36
(CSI002.36)   US   12/910,476
10/22/10   8,402,193
03/19/13   09/001,799
12/31/97   12/13/17   Granted:
3.5 Year Tax Paid: 08/25/16 CROSS1120-37
(CSI002.37)   US   12/910,515
10/22/10   7,987,311
07/27/11   09/001,799
12/31/97   12/13/17   Granted:
3.5 Year Tax Paid 01/05/15 CROSS1120-38
(CSI002.38)   US   13/197,534
08/03/11   8,402,194
03/19/13   09/001,799
12/31/97   12/13/17   Granted:
3.5 Year Tax Paid: 08/25/16 CROSS1120-39
(CSI002.39)   US   13/766,301
02/13/13       09/001,799
12/31/97   12/13/17   Allowed:
Issue Fee due:  10/28/17

 

 

 

 

CROSS1120-FOREIGN

 

Attorney Dkt.   Country   Application No.
FilingDate   Grant No
Grant Date   Priority No.
Priority Date   Expiration Date   Status CROSS1120/PCT   PCT   US98/27689
12/28/98       09/001,799
12/31/97       Inactive CROSS1120/CA   Canada   2,315,199
12/28/98   2,315,199
01/21/03   09/001,799
12/31/97   12/28/18   Granted:
Annuity Due: 12/28/17 CROSS1120/EP   EPO   98966104.6
12/28/98   1044414
12/14/05   09/001,799
12/31/97   12/28/18   Granted:
See DE, FR, GB, HK CROSS1120/DE   Germany   98966104.6
12/28/98   69832818.3
12/14/05   09/001,799
12/31/97   12/28/18   Granted:
Annuity Due: 12/28/17 CROSS1120/FR   France   98966104.6
12/28/98   1044414
12/14/05   09/001,799
12/31/97   12/28/18   Granted:
Annuity Due: 12/28/17 CROSS1120/GB   United Kingdom   98966104.6
12/28/98   1044414
12/14/05   09/001,799
12/31/97   12/28/18   Granted:
Annuity Due: 12/28/17 CROSS1120/JP   Japan   526873/2000
12/28/98   4691251
02/25/11   09/001,799
12/31/97   12/28/18   Granted:
Annuity Due: 02/25/18 CROSS1120/HK   Hong Kong   01100975.8
02/12/01               Inactive CROSS1121/EP   EPO   05027161.8
12/13/05               Inactive CROSS1123/EP   EPO   10012769.5
10/01/10               Inactive CROSS1124/EP   EPO   10012770.3
10/01/10       09/001,799
12/31/97       Inactive CROSS1125/EP   EPO   10012768.7
10/01/10       09/001,799
12/31/97       Inactive

 

 

 

 

NEXQL PATENTS

 

Title: Index Relational Processor Inventor(s) Jay Bruce Ross and Merle Thomas
Prouix

 

SIPLG (CRDS)

Reference No.

 

 

Country

  Application No.
Application Date  

Patent No.

Issue Date

 

Priority No.

Priority Date

 

 

Expiration Date

 

 

Status/Remarks

CROSS2070

(CSI0_____)

  US  

09/390,221

09/03/99

 

6,334,123

12/25/01

      09/03/19  

Granted:

11.5 Year Tax Paid 06/03/13

 

Title: Method and Apparatus for Implementing Run-Length Compression Inventor(s)
Jay Bruce Ross

 

SIPLG (CRDS)

Reference No.

 

 

Country

  Application No.
Application Date  

Patent No.

Issue Date

 

Priority No.

Priority Date

 

 

Expiration Date

 

 

Status/Remarks

CROSS2080

(CSI0_____)

  US  

09/389,542

09/03/99

 

6,535,150

03/18/03

      09/03/19  

Lapsed Per Client Instr.

 

 

Title: Asynchronous Concurrent Dual-Stream FIFO Inventor(s) Jay Bruce Ross

 

SIPLG (CRDS)

Reference No.

 

 

Country

  Application No.
Application Date  

Patent No.

Issue Date

 

Priority No.

Priority Date

 

 

Expiration Date

 

 

Status/Remarks

CROSS2090

(CSI0_____)

  US  

09/390,499

09/03/99

 

6,507,877

01/14/03

      09/03/19  

Lapsed Per Client Instr.

 

 

 

 

 

Title: Enhanced Boolean Processor with Parallel Input Inventor(s) Jay Bruce Ross

 

SIPLG (CRDS)

Reference No.

 

 

Country

 

Application No.

Application Date

 

Patent No.

Issue Date

 

Priority No.

Priority Date

 

 

Expiration Date

 

 

Status/Remarks

CROSS2100-1

(CSI0_____)

  US  

09/684,761

10/06/00

 

6,829,695

12/07/04

 

09/684,761

09/03/99

  01/22/23  

Granted:

11.5 Year Tax Paid: 03/07/16

 

Title: Enhanced Boolean Processor with Parallel Input Inventor(s) Jay Bruce Ross

 

SIPLG (CRDS)

Reference No.

 

 

Country

 

Application No.

Application Date

 

Patent No.

Issue Date

 

Priority No.

Priority Date

 

 

Expiration Date

 

 

Status/Remarks

CROSS2100-2

(CSI0_____)

  US  

11/005,666

12/07/04

     

09/684,761

09/03/99

09/389,567

09/03/99

      Abandoned.

 

Title: Enhanced Boolean Processor with Parallel Input Inventor(s) Jay Bruce Ross

 

SIPLG (CRDS)

Reference No.

 

 

Country

 

Application No.

Application Date

 

Patent No.

Issue Date

 

Priority No.

Priority Date

 

 

Expiration Date

 

 

Status/Remarks

CROSS2100-3

(CSI0_____)

  US  

10/871,858

06/18/04

     

09/684,761

09/03/99

      Abandoned.

 

 

 

 

Docket #   Title   Application
No   Application
Date   Grant
No   Grant
Date   Inventors   Status CROSS1100-1   Error Detection and Recovery for
Sequential Access Devices in a Fibre Channel Protocol   09/087,684   05/29/98  
6,148,421   11/14/00   Smith Brian R., Hoese Geoffrey B., Wanamaker Neil T.,
Reynolds Robert A.   Granted:
11.5 Year Tax Paid: 05/02/12 CROSS1100-AU   Error Detection and Recovery for
Sequential Access Devices in a Fibre Channel Protocol   77088/98   05/29/98  
737205   11/22/01   Smith Brian R., Hoese Geoffrey B., Wanamaker Neil T.,
Reynolds Robert A.   Granted
05/30/17: Instr. to FA to pay Annuity CROSS1140   Fibre Channel to SCSI
Addressing Method and System   09/019,448   02/05/98   6,041,381   03/21/00  
Hoese Geoffrey   Granted
11.5 Year Tax Paid 09/12/11 CROSS1160   System for Segmenting a Fibre Channel
Arbitrated Loop to a Plurality of Logical Sub-Loops Using Segmentation
Router as a Master to Cause the Segmentation of Physical Addresses   09/076,244
  05/12/98   6,314,488   11/06/01   Smith Brian R.   Granted
11.5 Year Tax Paid 05/01/13 CROSS1200   Method and System for Managing I/O
Transmissions in a Fibre Channel Network After a Break in Communication  
09/153,576   09/15/98   6,643,693   11/04/03   Arroyo Keith M., Reynolds Robert
A.   Granted
11.5 Year Tax Paid 04/01/15 CROSS1220   Method and System for Maintaining
Reserve Command Relationships in a Fibre Channel Network   09/251,759   02/18/99
  6,138,161   10/24/00   Arroyo Keith M., Wilson Stephen K., Reynolds Robert A.
  Granted
11.5 Year Tax Paid 04/04/12 CROSS1240-1   Method and System for Multi-Initiator
Support to Streaming Devices in a Fibre Channel Network   10/794,975   03/05/04
  7,254,329   08/07/07   Arroyo Keith M., Reynolds Robert A.   Granted:
11.5 Year Tax Due 02/07/19 CROSS1260   System and Method for Resolving Fibre
Channel Device Addresses on a Network Using the Device's Fully Qualified Domain
Name   09/158,991   09/23/98   6,199,112   03/06/01   Wilson Stephen K.  
Granted
11.5 Year Tax Paid 08/30/12 CROSS1280   System and Method for Providing a Proxy
FARP for Legacy Storage Devices   09/159,163   09/23/98   6,151,331   11/21/00  
Wilson Stephen K.   Granted
11.5 Year Tax Paid  05/02/12 CROSS1290   Streaming Method and System for Fiber
Channel Network Devices   09/259,160   02/26/99   6,341,315   01/22/02   Arroyo
Keith M., Wilson Stephen K.   Granted
11.5 Year Tax Paid 07/08/13 CROSS1290-2   Streaming Method for Fibre Channel
Network Devices   10/914,574   08/09/04   8,271,673   09/18/12   Arroyo Keith
M., Wilson Stephen K.   Granted:
7.5 Year Tax Due: 03/18/20 CROSS1290-3   Streaming Method and System for Fibre
Channel Network Devices   13/312,068   12/06/11   8,904,023   12/02/14   Arroyo
Keith M., Wilson Stephen K.   Granted:
3.5 Year Tax Due: 06/02/18 CROSS1290-4   Streaming Methods and Systems for
Network Devices   14/519,977   10/21/14   9,455,938   09/27/16   Arroyo Keith
M., Wilson Stephen K.   Granted:
No Maint Fees will be due. Patent will expire before first maint fee due date
due to priorty claim. CROSS1290-5   Streaming Methods and Systems for Network
Devices   15/251,237   08/30/16           Arroyo Keith M., Wilson Stephen K.  
Pending:
Awaiting First OA CROSS1300   Method and System for Persistent Unit Attention in
a Fibre Channel Storage Router   09/725,353   11/29/00   6,718,402   04/06/04  
Arroyo Keith   Granted:
11.5 Year Tax Paid 09/23/15

 

 

 

 

Docket #   Title   Application
No   Application
Date   Grant
No   Grant
Date   Inventors   Status CROSS1310   Method and System for Un-tagged Command
Queuing   09/345,153   06/30/99   6,205,141   03/20/01   Arroyo Keith M.  
Granted
11.5 Year Tax Paid 09/04/12 CROSS1330-1   System for Mapping Addresses of  SCSI
Devices Between Plurality of SANS that can Dynamically Map SCSI
Device Addresses Across a SAN Extender   09/710,213   11/10/00   6,848,007  
01/25/05   Reynolds Robert, Haechten John B., Smeltzer Kenneth D.   Granted
11.5 Year Tax Paid: 07/18/16 CROSS1340-1   Encapsulation Protocol for Linking
Storage Area Networks Over a Packet-Based Network   09/709,807   11/10/00  
6,965,934   11/15/05   Reynolds Robert A., Haechten John B., Smeltzer Kenneth D.
  Granted:
11.5 Year Tax Due: 11/15/17 w/surcharge CROSS1350-1   Method and System for
Decreasing Routing Latency for Switching Platforms with Variable Configuration  
09/707,443   11/07/00   6,922,391   07/26/05   Mao Andy, King Steve, Bucht Tom  
Granted:
11.5 Year Tax Paid: 01/23/17 CROSS1350-2   Method and System for Decreasing
Routing Latency for Switching Platforms with Variable Configuration   11/091,151
  03/28/05   7,508,756   03/24/09   Mao Andy, King Steve, Bucht Tom   Granted:
7.5 Year Tax Due: 09/24/16 CROSS1350-3   Method and System for Decreasing
Routing Latency for Switching Platforms with Variable Configuration   12/409,331
  03/23/09   7,912,053   03/22/11   Mao Andy, King Steve, Bucht Tom   Granted:
7.5 Year Tax Due: 09/22/18 CROSS1360-1   Method of Routing HTTP and FTP Services
Across Heterogeneous Networks   09/707,428   11/07/00   6,970,942   11/29/05  
King Steve, Stillwell Paul M., Mao Chiayin   Granted
11.5 Year Tax Due: 11/29/17 w/surcharge CROSS1370-1   A Method and System for
Decoding 8-Bit/10-Bit Data Using Limited Width Decoders   09/662,075   09/14/00
  6,392,570   05/21/02   Bueht Tom   Granted
11.5 Year Tax Paid 09/26/13 CROSS1390-1   System and Method for Controlling
Readout of Frame Data From Buffer   09/695,758   10/24/00   6,668,290   12/23/03
  Nelson Michael A.   Granted
11.5 Year Tax Paid: 04/01/15 CROSS1400-1   System and Method for Storing Frame
Header Data   09/695,755   10/24/00   7,333,489   02/19/08   Nelson Michael A.,
Bucht Tom   Granted:
11.5 Year Tax Due: 08/19/19 CROSS1410-1   System and Method for Jitter
Compensation in Data Transfers   09/695,754   10/24/00   6,977,897   12/20/05  
Nelson Michael A., Bucht Tom   Granted:
11.5 Year Tax Due: 12/20/17 w/surcharge CROSS1420-1   High Speed Dynamic
Multi-Lane Deskwer   09/682,665   10/03/01   6,654,824   11/25/03   Vila Diego
Fernando, Mateus Marcus Sebastian, Umberhocker Richard B.   Granted
11.5 Year Tax Paid: 04/01/15 CROSS1430-1   HHigh Speed Coordinated Multi-Channel
Elastic Buffer   09/682,673   10/04/01   6,757,348   06/29/04   Vila Diego
Fernando, Mateus Marcus Sebastian, Umberhocker Richard B.   Granted:
11.5 Year Tax Paid: 09/23/15 CROSS1450   Network Analyzer/Sniffer with Multiple
Protocol Capabilities   09/681,535   04/24/01   6,894,979   05/17/05   LEE DAVID
G.   Granted:
11.5 Year Tax Paid 09/29/16 CROSS1470-1   Method and System for Reconciling
Extended Copy Command Target Descriptor Lengths   10/085,962   02/28/02  
6,650,656   11/18/03   Tyndall John   Granted
11.5 Year Tax Paid: 04/01/15 CROSS1470-2   Method and System for Overlapping
Data Flow within a SCSI Extended Copy Command   10/085,918   02/28/02  
6,704,809   03/09/04   Tyndall John   Granted:
11.5 Year Tax Paid: 09/04/15

 

 

 

 

Docket #   Title   Application
No   Application
Date   Grant
No   Grant
Date   Inventors   Status CROSS1490   System and Method for Inquiry Caching  
10/064,080   06/10/02   7,603,449   10/13/09   CULP Bradfred W., Dale Stephen G.
  Granted:
7.5 Year Tax Due: 10/13/17 w/surcharge CROSS1490-1   System and Method for
Inquiry Caching in a Storage Area Network   11/855,348   09/14/07   8,341,211  
12/25/12   CULP Bradfred W., Dale Stephen G.   Granted:
7.5 Year Tax Due: 06/25/20 CROSS1490-2   System and Method for Servicing Inquiry
Commands about Target Devices in Storage Area Network   12/403,971   03/13/09  
7,904,539   03/08/11   CULP Bradfred W., Dale Stephen G.   Granted:
7.5 Year Tax Due: 09/08/18 CROSS1490-3   System and Method for Inquiry Caching
in a Storage Area Network   13/042,209   03/07/11   8,543,643   09/24/13   CULP
Bradfred W., Dale Stephen G.   Granted:
7.5 Year Tax Due: 03/24/21 CROSS1490-4   System and Method for Caching Inquiry
Data About Sequential Access Devices   13/685,539   11/26/12   8,655,977  
02/18/14   CULP Bradfred W., Dale Stephen G.   Granted:
3.5 Year Tax Due: 02/18/18 w/surcharge CROSS1520   Pseudorandom Data Pattern
Verifier with Automatic Synchronization   10/631,173   07/31/03   7,424,075  
09/09/08   Vila Diego F., Mateus Marcus S.   Granted:
11.5 Year Tax Due: 03/09/20 CROSS1530   Mechanism for Enabling Enhanced Fibre
Channel Error Recovery Across Redundant Paths Using SCSI Level Commands  
10/064,436   07/12/02   7,024,591   04/04/06   Tyndall John F., Moody II William
H.   Granted:
11.5 Year Tax Due: 04/04/18 w/surcharge CROSS1530-1   Mechanism for Enabling
Enhanced Fibre Channel Error Recovery Across Redundant Paths Using SCSI Level
Commands   11/218,134   09/01/05   7,350,114   03/25/08   Moody Bill, Tyndall
John F.   Granted:
11.5 Year Tax Due: 09/25/19 CROSS1540   Partitioned Library   10/065,329  
10/04/02   6,804,753   10/12/04   Tyndall John F., Moody II William H.  
Granted:
11.5 Year Tax Paid 03/07/16 CROSS1550   Method for Dynamic Control of Concurrent
Extended Copy Tasks   10/293,431   11/13/02   6,704,836   03/09/04   Griswold
Robert M., Justiss Steven A.   Granted:
11.5 Year Tax Paid: 09/04/15 CROSS1560   System and Method for Maintaining and
Reporting a Log of Multi-Threaded Backups   10/636,042   08/07/03   7,251,708  
07/31/07   Sims Robert C., Justiss Steven A.   Granted:
11.5 Year Tax Due: 01/31/19 CROSS1560-1   System and Method for Processing
Multiple Concurrent Extended Copy Commands   11/020,960   12/22/04   7,552,294  
06/23/09   Justiss Steven A.   Granted:
11.5 Year Tax Due: 12/23/20 CROSS1560-2   System and Method for Message and
Error Reporting for Multiple Concurrent Extended Copy Commands to a Single
Destination Device   11/020,971   12/22/04   7,447,852   11/04/08   Justiss
Steven A.   Granted:
11.5 Year Tax Due: 05/04/20 CROSS1570-1   System and Method of Supporting Kernel
Functionality   10/647,050   08/22/03   7,448,049   11/04/08   Xing Lisheng
"Lee"   Granted
11.5 Year Tax Due: 05/04/20 CROSS1580-1   System and Method for Controlling
Access to Multiple Physical Media Libraries   10/704,265   11/07/03   7,505,980
  03/17/09   Tyndall John F., Moody II William H.   Granted:
11.5 Year Tax Due: 09/17/20

 

 

 

 

Docket #   Title   Application
No   Application
Date   Grant
No   Grant
Date   Inventors   Status CROSS1580-2   Method for Presenting a Single Logical
Media Library Robotics Controller While Actually Operating Multiple Physical
Media Library Robotics Controllers in an Aggregated Media Library Environment  
10/703,965   11/07/03   7,752,384   07/06/10   Moody II William H., Sims Robert
C.   Granted:
7.5 Year Tax Due: 01/06/18 CROSS1580-3   System and Method for Controlling
Access to Multiple Physical Media Libraries   12/391,034   02/23/09   7,971,019
  06/28/11   Tyndall John F., Moody II William H.   Granted:
7.5 Year Tax Due: 12/28/18 CROSS1580-4   System and Method for Controlling
Access to Media Libraries   12/795,497   06/07/10   7,941,597   05/10/11   Moody
II William H., Sims Robert C.   Granted:
7.5 Year Tax Due: 11/10/18 CROSS1620   System and Method for Device Management  
11/021,932   12/22/04   7,827,261   11/02/10   Hill III Joseph M., Griswold
Robert M.   Granted:
7.5 Year Tax Due:  05/02/18 CROSS1620-1   System and Method for Device
Management   12/915,977   10/29/10   8,156,215   04/10/12   Hill III Joseph M.,
Griswold Robert M.   Granted:
7.5 Year Tax Due: 10/10/19 CROSS1630   Interface Device and Method for Command
Processing   10/929,220   08/30/04   7,711,871   05/04/10   Haechten John B.,
Tyndall John F.   Granted:
7.5 Year Tax Due: 05/04/18 w/surcharge CROSS1630-1   Interface Device and Method
for Command Processing   12/771,403   04/30/10   7,899,945   03/01/11   Haechten
John B., Tyndall John F.   Granted:
7.5 Year Tax Due: 09/01/18 CROSS1640   Consolidation of Unit Attentions  
10/782,136   02/19/04   7,127,572   10/24/06   Whittington Daniel, Tyndall John,
Gao LinLin   Granted:
11.5 Year Tax Due: 04/24/18 CROSS1670-1   Method and System for Persistent
Reservation Handling in a Multi-Initiator Environment   11/365,399   03/01/06  
7,716,406   05/11/10   Tyndall John F.   Granted:
7.5 Year Tax Due: 05/11/18 w/surcharge CROSS1680   System and Method for
Processing Commands   11/004,297   12/03/04   7,500,047   03/03/09   Tyndall
John, Gao LinLin   Granted:
11.5 Year Tax Due: 09/03/20 CROSS1710   System and Method for Centralized
Partitioned Library Mapping   10/880,360   06/29/04   7,428,613   09/23/08  
Justiss Steven A., Gao LinLin, Tyndall John F.   Granted:
11.5 Year Tax Due: 03/23/20 CROSS1720   System and Method for Distributed
Partitioned Library Mapping   10/880,162   06/29/04   7,454,565   11/18/08  
Justiss Steven A., Gao LinLin, Tyndall John F.   Granted:
11.5 Year Tax Due: 05/18/20 CROSS1720-1   System and Method for Distributed
Partitioned Library Mapping   12/237,969   09/25/08   7,752,416   07/06/10   Gao
Lin, Justiss Steven A., Gao LinLin, Tyndall John F.   Granted:
7.5 Year Tax Due: 01/06/18 CROSS1720-2   System and Method for Distributed
Partitioned Library Mapping   12/762,066   04/16/10   7,975,124   07/05/11   Gao
Lin, Justiss Steven A., Gao LinLin, Tyndall John F.   Granted:
7.5 Year Tax Due: 01/05/19 CROSS1760   Method and System for Distributing
Management Information Over Power Networks   11/043,327   01/26/05   7,327,223  
02/05/08   Schlinger Bryan   Granted:
11.5 Year Tax Due: 08/05/19 CROSS1760-1   Method and System for Distributing
Management Information Over Power Networks   11/820,265   06/18/07   7,453,348  
11/18/08   Schlinger Bryan   Granted:
11.5 Year Tax Due: 05/18/20 CROSS1770-1   Method and System for Coordinating
Interoperability Between Devices of Varying Capabilities in a Network  
11/044,525   01/27/05   7,310,696   12/18/07   Haechten John B., Dale Stephen
G., Tyndall John F.   Granted:
11.5 Year Tax Due: 06/18/19 CROSS1770-2   Method and System for Coordinating
Interoperability Between Devices of Varying Functionality in a Network  
11/893,285   08/15/07   7,415,564   08/19/08   Haechten John B., Dale Stephen
G., Tyndall John F.   Granted:
11.5 Year Tax Due: 02/19/20

 

 

 

 

Docket #   Title   Application
No   Application
Date   Grant
No   Grant
Date   Inventors   Status CROSS1770-3   Apparatus for Coordinating
Interoperability Between Devices of Varying Capabilities in a Network  
11/934,446   11/02/07   7,584,318   09/01/09   Haechten John B., Dale Stephen
G., Tyndall John F.   Granted:
11.5 Year Tax Due: 03/01/21 CROSS1790-1   System and Method for Command Tracking
  11/021,544   12/22/04   7,711,805   05/04/10   Dale Stephen G.   Granted:
7.5 Year Tax Due: 05/04/18 w/surcharge CROSS1800   Method and System for
Presenting Contiguous Element Addresses for a Partitioned Media Library  
11/045,443   01/28/05   7,370,173   05/06/08   Justiss Steven A., Gao LinLin,
Kramer Alexander   Granted:
11.5 Year Tax Due: 11/06/19 CROSS1810   System and Method for Handling Status
Commands Director to a Partitioned Media Library   11/046,019   01/28/05  
7,971,006   06/28/11   Justiss Steven A., Gao LinLin   Granted:
7.5 Year Tax Due: 12/28/18 CROSS1820   System and Method for Mode Select
Handling for a Partitioned Media Library   11/046,066   01/28/05   7,451,291  
11/11/08   Justiss Steven A., Gao LinLin   Granted:
11.5 Year Tax Due: 05/11/20 CROSS1860-1   System and Method for Providing
Service Management in a Distributed Database System   11/153,873   06/15/05  
7,984,073   07/19/11   Ewing David B., Walker Richard S., Basiago Jack  
Granted:
7.5 Year Tax Due: 01/19/19 CROSS1880   Application-Layer Monitoring of
Communication Between One or More Database Clients and One or More Database
Servers   10/934,887   09/03/04   7,509,330   03/24/09   Ewing David B.,
Martindale Rick A.   Granted:
11.5 Year Tax Due: 09/24/20 CROSS1880-1   Application-Layer Monitoring of
Communication Between One or More Database Clients and One or More Database
Servers   12/359,379   01/26/09   7,895,160   02/22/11   Ewing David B.,
Martindale Rick A.   Granted:
7.5 Year Tax Due: 08/22/18 CROSS1890   Providing Application-Layer Functionality
Between One or More Database Clients and One or More Database Servers  
10/933,790   09/03/04   7,529,753   05/05/09   Ewing David B.   Granted:
11.5 Year Tax Due: 11/05/20 CROSS1900   Method and System for Handling Commands
Requesting Movement of a Data Storage Medium Between Physical Media Libraries  
11/118,167   04/29/05   7,788,413   08/31/10   Justiss Steven A., Kramer
Alexander   Granted:
7.5 Year Tax Due: 02/28/18 CROSS1910-1   System and Method for Performing Backup
Using Extended Copy Functionality   11/788,650   04/20/07   7,711,913   05/04/10
  Moody II William H., Sims Robert C.   Granted:
7.5 Year Tax Due: 05/04/18 w/surcharge CROSS1920-1   System and Method for
Defining and Implementing Policies in a Database System   11/589,333   10/30/06
  7,962,513   06/14/11   Boles David A., Young H. Bret, Basiago Jack   Granted:
7.5 Year Tax Due: 12/14/18 CROSS1940   System and Method for Summarizing and
Reporting Impact of Database Statements   11/904,605   09/27/07   7,831,621  
11/09/10   Banks Kevin R., Kolbly Donovan, Blackmon Matt   Granted:
7.5 Year Tax Due: 05/09/18 CROSS1950   Method and System for Non-Intrusive
Monitoring of Library Components   11/801,809   05/11/07   8,832,495   09/09/14
  Foster Michael R., Rohner Allen, Tou Patrick S.   Granted:
3.5 Year Tax Due: 03/09/18 CROSS1950-1   Method and System for Non-Intrusive
Monitoring of Library Components   14/324,980   07/07/14   8,949,667   02/03/15
  Foster Michael R., Rohner Allen, Tou Patrick S.   Granted:
3.5 Year Tax Due: 08/03/18

 

 

 

 

Docket #   Title   Application
No   Application
Date   Grant
No   Grant
Date   Inventors   Status CROSS1950-2   Method and System for Non-Intrusive
Monitoring of Library Components   14/574,077   12/17/14   9,280,410   03/08/16
  Foster Michael R., Rohner Allen, Tou Patrick S.   Granted:
3.5 Year Tax Due: 09/08/19 CROSS1950-3   Method and System for Monitoring of
Library Components   15/010,954   01/29/16   9,501,348   11/22/16   Foster
Michael R., Rohner Allen, Tou Patrick S.   Granted:
3.5 Year Tax Due: 05/22/20 CROSS1950-4   Method and System for Monitoring of
Library Components   15/297,907   10/19/16           Foster Michael R., Rohner
Allen, Tou Patrick S.   Closed per client instr of 07/12/17 CROSS1960   System
and Method for Enabling Encryption   12/025,181   02/04/08   8,250,378  
08/21/12   Sims Robert C.   Granted:
7.5 Year Tax Due: 02/21/20 CROSS1980   System and Method for Verifying Paths to
a Database   12/051,555   03/19/08   7,908,252   03/15/11   Landt Matthew
Eugene, Basiago Jack   Granted:
7.5 Year Tax Due: 09/15/18 CROSS1990   Media Library Monitoring System and
Method   12/024,755   02/01/08   7,908,366   03/15/11   Sims Robert C.  
Granted:
7.5 Year Tax Due: 09/15/18 CROSS1990-1   Media Library Monitoring System and
Method   13/430,429   03/26/12   8,639,807   01/28/14   Sims Robert C.  
Granted:
3.5 Year Tax Due: 01/28/18 w/surcharge CROSS1990-2   Media Library Monitoring
System and Method   13/459,720   04/30/12   8,631,127   01/14/14   Sims Robert
C.   Granted:
3.5 Year Tax Due: 01/14/18 w/surcharge CROSS1990-3   Media Library Monitoring
System and Method   14/099,591   12/06/13   9,092,138   07/28/15   Sims Robert
C.   Granted:
3.5 Year Tax Due: 01/28/19 CROSS2010   System and Method for Archive
Verification   12/025,436   02/04/08   8,645,328   02/04/14   Sims Robert C.  
Granted:
3.5 Year Tax Due: 02/04/18 w/surcharge CROSS2010-1   System and Method for
Archive Verification   14/144,067   12/30/13           Sims Robert C.   Closed
per client instr of 06/07/17 CROSS2020   System and Method of Network Diagnosis
  12/025,322   02/04/08   7,974,215   07/05/11   Sims Robert C.   Granted:
7.5 Year Tax Due: 01/05/19 CROSS2020-1   System and Method of Network Diagnosis
  13/091,877   04/21/11   8,644,185   02/04/14   Sims Robert C.   Granted:
3.5 Year Tax Due: 02/04/18 w/surcharge CROSS2020-2   System and Method of
Network Diagnosis   14/144,077   12/30/13   9,699,056   07/04/17   Sims Robert
C.   Granted:
3.5 Year Tax Due: 01/04/21 CROSS2020-3   System and Method of Network Diagnosis
  15/000,888   01/19/16           Sims Robert C.   Closed per client instr of
07/12/17 CROSS2030   Data Files Systems with Hierarchical Ranking for Different
Activity Groups   10/387,120   03/11/03   7,185,028   02/27/07   Lechner Ulrich
  Granted:
11.5 Year Tax Due: 08/27/18 CROSS2030-1   Data Files Systems with Hierarchical
Ranking for Different Activity Groups   11/675,780   02/16/07   7,584,190  
09/01/09   Lechner Ulrich   Granted:
11.5 Year Tax Due: 03/01/21 CROSS2030/DE   Data Files Systems with Hierarchical
Ranking for Different Activity Groups   102 11 606   03/12/02   102 11 606 B4  
06/08/17   Lechner Ulrich   Granted
Annuity Due: 03/12/18 CROSS2040   Method for Configuring Centralized Encryption
Policies for Devices   12/115,218   05/05/08   8,601,258   12/03/13   Tou
Patrick S., DeLine Peter Anthony   Granted:
3.5 Year Tax Due: 12/03/17 w/surcharge CROSS2050   Determining, Displaying and
Using Tape Drive Session Information   12/025,300   02/04/08   9,015,005  
04/21/15   Stripling Jeffrey Ricks   Granted:
3.5 Year Tax Due: 10/21/18 CROSS2050-1   Determining, Displaying and Using Tape
Drive Session Information   14/640,072   03/06/15           Stripling Jeffrey
Ricks   Closed per client instr of 07/12/17

 

 

 

 

Docket #   Title   Application
No   Application
Date   Grant
No   Grant
Date   Inventors   Status CROSS2060   System and Method for Adjusting to Drive
Specific Criteria   12/201,956   08/29/08   8,555,053   10/08/13   Vitalo
Michael, Gosha Michael   Granted:
3.5 Year Tax Due: 10/08/17 w/surcharge CROSS2110-1   System and Method for
Eliminating Performance Impact of Information Collection from Media Drives  
12/888,954   09/23/10           Bianchi Brian J., Justiss Steven A.   Pending:
Resp to Final OA Filed 05/22/17 as an RCE. CROSS2120   System and Method for
Identifying Failing Drives or Media in Media Library   12/692,403   01/22/10  
8,650,241   02/11/14   Bianchi Brian J., Sims Robert C., Moody II William H.  
Granted:
3.5 Year Tax Due: 02/11/18 w/surcharge CROSS2120-1   System and Method for
Identifying Failing Drives or Media in Media Library   14/143,046   12/30/13  
9,058,109   06/16/15   Bianchi Brian J., Sims Robert C., Moody II William H.  
Granted:  
3.5. Year Tax Due:  12/16/18 CROSS2130-1   System and Method for Archive
Verification According to Policies   12/861,609   08/23/10   8,843,787  
09/23/14   Stripling Jeffrey Ricks, Foster Michael R.   Granted:
3.5 Year Tax Due: 03/23/18 CROSS2130-2   System and Method for Archive
Verification According to Policies   14/464,034   08/20/14   9,081,730  
07/14/15   Stripling Jeffrey Ricks, Foster Michael R.   Granted:
3.5 Year Tax Due: 01/14/19 CROSS2130-3   System and Method for Archive
Verification According to Policies   14/737,007   06/11/15   9,317,358  
04/19/16   Stripling Jeffrey Ricks, Foster Michael R.   Granted:
3.5 Year Tax Due: 10/19/19 CROSS2130-4   System and Method for Archive
Verification According to Policies   15/067,004   03/10/16           Stripling
Jeffrey Ricks, Foster Michael R.   Pending:
Awaiting First OA CROSS2140   System and Method for Archive Verification Using
Multiple Attempts   12/861,612   08/23/10   8,631,281   01/14/14   Stripling
Jeffrey Ricks, Sims Robert C.   Granted:
3.5 Year Tax Due: 01/14/18 w/surcharge CROSS2140-1   System and Method for
Archive Verification Using Multiple Attempts   14/092,729   11/27/13   9,442,795
  09/13/16   Stripling Jeffrey Ricks, Sims Robert C.   Granted:
3.5 Year Tax Due: 03/13/2020 CROSS2140-2   System and Method for Archive
Verification Using Multiple Attempts   15/050,121   02/22/16           Stripling
Jeffrey Ricks, Sims Robert C.   Pending:
Awaiting First OA CROSS2150   System and Method for Implementing a Networked
File System Utilizing a Media Library   13/109,192   05/17/11   8,527,561  
09/03/13   Sims Robert C., Moody II William H.   Granted:
7.5 Year Tax Due: 03/03/21 CROSS2150-1   System and Method for Implementing a
Networked File System Utilizing a Media Library   13/950,075   07/24/13        
  Sims Robert C., Moody II William H.   Pending:
Resp to OA filed: 06/02/17 CROSS2160   System, Method and Computer Program
Product for Optimization of Tape Performance   13/267,758   10/06/11   8,817,411
  08/26/14   Sims Robert C., Moody II William H., Bianchi Brian J.   Granted:
3.5 Year Tax Due: 02/26/18 CROSS2160-1   System, Method and Computer Program
Product for Optimization of Tape Performance   14/448,647   07/31/14   9,013,823
  04/21/15   Sims Robert C., Moody II William H., Bianchi Brian J.   Granted:
3.5 Year Tax Due: 10/21/18 CROSS2160-2   System, Method and Computer Program
Product for Optimization of Tape Performance   14/671,849   03/27/15   9,128,619
  09/08/15   Sims Robert C., Moody II William H., Bianchi Brian J.   Granted:
3.5 Year Tax Due: 03/08/19 CROSS2170   System, Method and Computer Program
Product for Optimization of Tape Performance Using Distributed File Copies  
13/267,763   10/06/11   8,566,517   10/22/13   Sims Robert C., Moody II William
H.   Granted:
3.5 Year Tax Due: 10/22/17 w/surcharge

 

 

 

 

Docket #   Title   Application
No   Application
Date   Grant
No   Grant
Date   Inventors   Status CROSS2170-1   System, Method and Computer Program
Product for Optimization of Tape Performance Using Distributed File Copies  
14/031,924   09/19/13   8,856,437   10/07/14   Sims Robert C., Moody II William
H.   Granted:
3.5 Year Tax Due: 04/07/18 CROSS2180   System, Method and Computer Program
Product for Trickling Data to a Host   13/267,665   10/06/11           Sims
Robert C., Moody II William H., Bianchi Brian J.   Pending:
Resp to OA Due: 10/25/17 CROSS2190   System, Method and Computer Program Product
for Retrieving a File After an Error   13/267,743   10/06/11           Bianchi
Brian J.   Closed per client instr of 06/07/17 CROSS2200   System, Method and
Computer Program Product for a Self-Describing Tape that Maintains Metadata of a
Non-Tape File System   13/451,812   04/20/12   8,832,365   09/09/14   Sims
Robert C., Moody II William H., Bianchi Brian J., Young Charles, McElroy Gary,
Stripling Jeffrey Ricks   Granted:
3.5 Year Tax Due: 03/09/18 CROSS2200-1   System, Method and Computer Program
Product for a Self-Describing Tape that Maintains Metadata of a Non-Tape File
System   14/444,614   07/28/14   9,323,776   04/26/14   Sims Robert C., Moody II
William H., Bianchi Brian J., Young Charles, McElroy Gary, Stripling Jeffrey
Ricks   Granted:
3.5 Year Tax Due: 10/26/19 CROSS2210-1   System and Method for Enhancing Data
Reliability and Recovering from Media Errors   13/847,965   03/20/13          
Moody II William H., Sims Robert C., Bianchi Brian J., DeLine Peter Anthony,
Roychowdhury Debasmita, Mosely Patrick E., Matchefts Marco James, Little
Christopher Brian, Hubbard Amanda T.   Pending:
Resp to OA Filed 05/02/17 CROSS2220   System, Method and Computer Program
Product for Host System LTFS Auto-Adaptation   13/531,310   06/22/12   9,141,542
  09/22/15   Justiss Steven A., DeLine Peter Anthony, Moody II William H.  
Granted:
3.5 Year Tax Due: 03/22/19 CROSS2230   System, Method and Computer Program
Product for Controlling File Migration in Archiving Systems   13/532,512  
06/25/12   9,031,912   05/12/15   Rogers Austin, Moody II William H., DeLine
Peter Anthony   Granted:
3.5 Year Tax Due: 11/12/18 CROSS2230-1   System, Method and Computer Program
Product for Controlling File Migration in Archiving Systems   14/687,492  
04/15/15           Rogers Austin, Moody II William H., DeLine Peter Anthony  
Closed Per Client Instr. 07/26/17 CROSS2240   System, Method and Computer
Program Product for Synchronizing Data Written to Tape Including Writing an
Index into a Data Partition so that Data can be Recovered in Case of Failure  
13/532,518   06/25/12   8,954,663   02/10/15   Sims Robert C., Moody II William
H., Klein Andrew Glen   Granted:
3.5 Year Tax Due: 08/10/18 CROSS2240-1   System, Method and Computer Program
Product for Synchronizing Data Written to Tape Including Writing an Index into a
Data Partition   14/591,136   01/07/15   9,235,347   01/12/16   Sims Robert C.,
Moody II William H., Klein Andrew Glen   Granted:
3.5 Year Tax Due: 07/12/19 CROSS2240-2   System, Method and Computer Program
Product for Synchronizing Data Written to Tape Including Writing an Index into a
Data Partition   14/964,942   12/10/15   9,606,740   03/28/17   Sims Robert C.,
Moody II William H., Klein Andrew Glen   Granted:
3.5 Year Tax Due: 09/28/20

 

 

 

 

Docket #   Title   Application
No   Application
Date   Grant
No   Grant
Date   Inventors   Status CROSS2250   System, Method and Computer Program
Product for Recovering Stub Files   13/485,060   05/31/12   8,977,827   03/10/15
  Sims Robert C., Moody II William H., Bianchi Brian J.   Granted:
3.5 Year Tax Due: 09/10/18 CROSS2250-1   System, Method and Computer Program
Product for Recovering Stub Files   14/593,657   01/09/15           Sims Robert
C., Moody II William H., Bianchi Brian J.   Allowed:
Issue Fee Paid 08/01/17 CROSS2250-2   System, Method and Computer Program
Product for Recovering Stub Files   15/299,210   10/20/16           Sims Robert
C., Moody II William H., Bianchi Brian J.   Pending:
Resp to First OA Due: 09/29/17 CROSS2260   System, Method and Computer Program
Product for Partially Synchronous and Partially Asynchronous Mounts/Unmounts in
a Media Library   13/614,857   09/13/12   8,762,330   06/24/14   Kick Damien  
Granted:
3.5 Year Tax Due: 12/24/17 CROSS2260-1   System, Method and Computer Program
Product for Partially Synchronous and Partially Asynchronous Mounts/Unmounts in
a Media Library   14/271,130   05/06/14   9,087,073   07/21/15   Kick Damien  
Granted:
3.5 Year Tax Due: 01/21/19 CROSS2260-2   System, Method and Computer Program
Product for Partially Synchronous and Partially Asynchronous Mounts/Unmounts in
a Media Library   14/741,220   06/16/15           Kick Damien   Pending
Resp to Final OA Due: 08/15/17 CROSS2270   System and Method for Using a Memory
Buffer to Stream Data from a Tape to Multiple Clients   13/459,531   04/30/12  
9,563,365   02/07/17   Lenox Michael Eric   Granted:
3.5 Year Tax Due: 08/07/20 CROSS2270-1   System and Method for Using a Memory
Buffer to Stream Data from a Tape to Multiple Clients   15/386,258   12/21/16  
        Lenox Michael Eric   Pending:
Awaiting First OA CROSS2280   System, Method and Computer Program Product for
Tamper Protection in a Data Storage System   13/480,781   05/25/12   8,756,687  
06/17/14   Klein Andrew Glen, DeLine Peter Anthony, Moody II William H.  
Granted:
3.5 Year Tax Due: 06/17/18 w/surcharge CROSS2280-1   System, Method and Computer
Program Product for Tamper Protection in a Data Storage System   14/271,207  
05/06/14   9,170,745   10/27/15   Klein Andrew Glen, DeLine Peter Anthony, Moody
II William H.   Granted:
3.5 Year Tax Due: 04/27/19 CROSS2280-2   System, Method and Computer Program
Product for Tamper Protection in a Data Storage System   14/861,879   09/22/15  
        Klein Andrew Glen, DeLine Peter Anthony, Moody II William H.   Pending:
Awaiting First OA

 

 

 

 

EXHIBIT A

 

Form of Loan Documents

 

 

 

 

LOAN AGREEMENT

 

This Loan Agreement (this “Agreement”) dated as of [_________], 2017, is
executed by and between 210/CRDS INVESTMENT, LLC, a Texas limited liability
company (“Lender”), and CROSSROADS SYSTEMS, INC., a Delaware corporation
(“Borrower”).

 

In consideration of the Loans described below and the mutual covenants and
agreements contained herein, and intending to be legally bound hereby, Lender
and Borrower agree as follows:

 

1.             DEFINITIONS AND REFERENCE TERMS. In addition to any other terms
defined herein, the following terms shall have the meaning set forth with
respect thereto:

 

A.           “Acquisition” means any transaction, or series of related
transactions, consummated on or after the date hereof, by which Borrower or any
of its Subsidiaries directly or indirectly (a) acquires all or a portion of the
assets of any entity, whether through a merger, stock exchange, asset
acquisition, stock purchase, reorganization or similar business combination
transaction with one or more businesses; provided, however, that any such stock
purchase shall involve the purchase of at least a majority (in number of votes)
of the stock of such entity, or (b) acquires (in one transaction or as the most
recent transaction in a series of transactions) at least a majority (in number
of votes) of the equity securities (or other similar ownership interests) of any
entity.

 

B.           “Benefit Plan” has the meaning set forth in Section 4.M.

 

C.           “Business Day” means any day other than a Saturday, Sunday, or day
on which national banks are authorized to be closed under the laws of the State
of Texas.

 

D.           “Chapter 11 Case” has the meaning set forth in the Securities
Purchase Agreement.

 

E.           “Code” means the Internal Revenue Code of 1986, as amended, and the
regulations, rules, and other authoritative guidance issued thereunder.

 

F.           “Debtor Relief Laws” means the Bankruptcy Code of the United States
of America, and all other liquidation, conservatorship, bankruptcy, assignment
for the benefit of creditors, moratorium, rearrangement, receivership,
insolvency, reorganization, or similar debtor relief Laws of the United States
or other applicable jurisdictions from time to time in effect.

 

G.           “Default” means the occurrence of any event or existence of any
circumstance which, with the giving of notice or lapse of time or both, would
become an Event of Default.

 

H.           “ERISA” means the Employee Retirement Income Security Act of 1974,
as amended, or any successor law, and the regulations rules, and other
authoritative guidance issued thereunder.

 

I.           “Event of Default” has the meaning set forth in Section 7.

 

J.           “GAAP” means those generally accepted accounting principles and
practices, applied on a consistent basis, which are recognized as such by the
American Institute of Certified Public Accountants acting through its Accounting
Principles Board and the Financial Accounting Standards Board and/or their
respective successors and which are applicable in the circumstances as of the
date in question.

 

 1Loan Agreement

 

 

K.          “Hazardous Materials” means all materials defined as hazardous
materials or substances under any local, state or federal environmental laws,
rules or regulations, and petroleum, petroleum products, oil and asbestos.

 

L.           “Loan Documents” means this Agreement and any and all promissory
notes executed by Borrower in favor of Lender and all other documents,
instruments, security agreements, pledge agreements, guarantees, certificates
and other agreements executed and/or delivered by Borrower, any guarantor or
third party in connection with the Loans (including, for the avoidance of doubt,
the Securities Purchase Agreement).

 

M.           “Material Adverse Effect” means: (a) a material adverse effect upon
the operations, performance, business, properties, prospects, condition
(financial or otherwise) or results of operations of Borrower and its
Subsidiaries taken as a whole; (b) an impairment of the ability of Borrower to
perform its obligations under any Loan Document; or (c) a material adverse
effect upon the legality, validity, binding effect or enforceability against
Borrower of any provision of any Loan Document.

 

N.           “Permitted Acquisition” means an Acquisition with respect to which
each of the following conditions has been satisfied:

 

(i)          as of the closing date of such Acquisition, such Acquisition has
been approved and recommended by the board of directors or other applicable
governing body of the Target and the entity from which the Target is to be
acquired;

 

(ii)         as of the closing date of such Acquisition, after giving effect to
such Acquisition, no Default or Event of Default shall exist or occur as a
result of such Acquisition;

 

(iii)        at least thirty (30) days prior to the closing date of such
Acquisition, Borrower shall have provided Lender with notice of such proposed
Acquisition together with an executed term sheet and/or letter of intent
(setting forth in reasonable detail the terms and conditions of such
Acquisition);

 

(iv)        Lender shall have received and be reasonably satisfied with (A) such
information and documents that Lender may request with respect to such
Acquisition including, without limitation, executed counterparts of the
respective agreements, documents or instruments pursuant to which such
Acquisition is to be consummated, any schedules to such agreements, documents or
instruments and all other material ancillary agreements, instruments and
documents to be executed or delivered in connection therewith, (B) current
financial statements and historical operating information on the Target, (C) a
pro-forma balance sheet of Borrower and its Subsidiaries after giving effect to
the Acquisition, and (D) copies of the results of Borrower’s due diligence with
respect to the Target;

 

(v)         Lender has approved such Acquisition in its sole discretion; and

 

(vi)        all conditions to the Acquisition have been satisfied and the
agreement relating to the Acquisition is still in full force and effect.

 

 2Loan Agreement

 

 

O.           “Securities Purchase Agreement” means that certain Securities
Purchase Agreement by and between Lender and Borrower dated as of [_________],
2017.

 

P.           “Subsidiary” means a corporation, partnership, joint venture,
limited liability company or other business entity of which a majority of the
shares of securities or other interests having ordinary voting power for the
election of directors or other governing body (other than securities or
interests having such power only by reason of the happening of a
contingency) are at the time beneficially owned, or the management of which is
otherwise controlled, directly, or indirectly through one or more
intermediaries, or both, by such Borrower.

 

Q.           “Target” means a company to be acquired or whose assets are being
acquired.

 

2.             LOANS. Lender hereby agrees to make one or more loans (each, a
“Loan”, and collectively. the “Loans”) between the date hereof and [_________],
2022 to Borrower; provided that the aggregate principal amount of all Loans at
any time outstanding shall not exceed $10,000,000 (plus the amount of PIK
Interest (as defined in the Note defined below) added to the Note as principal
from time to time in accordance with the terms of the Note). Borrower shall
request a Loan by submitting to Lender an irrevocable notice in form and
substance satisfactory to Lender. Each such notice must be received by Lender no
later than 10:00 a.m. (Dallas, Texas time) at least ten (10) days prior to the
date on which such notice requests the Loan to be made (the “Loan Date”). Lender
shall, subject to satisfaction of all conditions set forth herein, make proceeds
of such requested Loan available to Borrower no later than 2:00 p.m. (Dallas,
Texas time) on the Loan Date. The obligation to repay the Loans is evidenced by
that certain Promissory Note dated as of the date hereof, executed by Borrower
and payable to the order of Lender in the original principal amount of
$10,000,000 (together with all renewals, extensions or rearrangements thereof,
the “Note”). All terms governing the repayment, interest rate and maturity date
of the Loans shall be as set forth in the Note.

 

3.             CONDITIONS PRECEDENT.

 

A.           The effectiveness of this Agreement is subject to the conditions
precedent that Lender shall have received the following items in form and
substance acceptable to Lender in its sole discretion:

 

(i)          an executed copy of this Agreement;

 

(ii)         an executed copy of the Note;

 

(iii)        such certificates of resolutions or other action, incumbency
certificates and/or other certificates of an officer of Borrower as Lender may
reasonably require evidencing the identity, authority and capacity of each
officer thereof authorized to act as an officer in connection with this
Agreement and the other Loan Documents;

 

(iv)        such documents and certifications as Lender may reasonably require
to evidence that Borrower is duly organized or formed, and that Borrower is
validly existing, in good standing and qualified to engage in business in each
jurisdiction where its ownership, lease or operation of properties or the
conduct of its business requires such qualification, except to the extent that
failure to do so could not reasonably be expected to have a Material Adverse
Effect;

 

 3Loan Agreement

 

 

(v)         a certificate signed by an officer of Borrower either (A) attaching
copies of all consents, licenses and approvals required in connection with the
execution, delivery and performance by Borrower and the validity against
Borrower of the Loan Documents, and such consents, licenses and approvals shall
be in full force and effect, or (B) stating that no such consents, licenses or
approvals are so required; and

 

(vi)        evidence that Borrower is in compliance with the insurance
requirements of Section 5.B.

 

B.           The obligation of Lender to make the initial Loan hereunder is
subject to the conditions precedent that, as of the date of such initial Loan,
Lender shall have received the following items in form and substance acceptable
to Lender in its sole discretion:

 

(i)          a security agreement executed by Borrower and its Subsidiaries in
favor of Lender (the “Security Agreement”) covering all personal property assets
of Borrower and its Subsidiaries;

 

(ii)         an intellectual property security agreement, subject to the
restrictions in the Borrower’s agreements with KIP CR P1, LP, executed by
Borrower and its Subsidiaries in favor of Lender;

 

(iii)        lien searches in the name of Borrower and its Subsidiaries in the
applicable jurisdictions of incorporation and each state or jurisdiction where
Borrower or any of its Subsidiaries maintains an office or has real property,
showing no financing statements, tax liens, judgment liens or other lien
instruments of record except for liens being released on the date hereof;

 

(iv)        searches in the name of Borrower and its Subsidiaries with the
United States Patent and Trademark Office and the United States Copyright
Office;

 

(v)         UCC-1 financing statement(s) in form appropriate for filing under
the Uniform Commercial Code of all jurisdictions that Lender may deem necessary
or desirable in order to perfect the liens created under the Security Agreement,
covering the collateral described in the Security Agreement; and

 

(vi)        if requested by Lender, a landlord lien waiver executed by each
landlord, in form and substance reasonably acceptable to Lender, for all real
property leased by Borrower or any of its Subsidiaries.

 

C.           The obligation of Lender to make each Loan hereunder (including the
initial Loan) is subject to the additional conditions precedent that:

 

(i)          the representations and warranties of Borrower and its Subsidiaries
contained in Section 4 or any other Loan Document, or which are contained in any
document furnished at any time under or in connection herewith or therewith,
shall be true and correct on and as of the date of such Loan;

 

(ii)         the covenants of Borrower and its Subsidiaries contained in any
Loan Document, or which are contained in any document furnished at any time
under or in connection herewith or therewith, shall be true and correct on and
as of the date of such Loan;

 

(iii)        no Default or Event of Default shall exist, or would result from
such Loan or from the application of the proceeds thereof;

 

 4Loan Agreement

 

 

(iv)        Lender shall have determined in its sole discretion that the Loan
will be treated as debt and not as equity for federal income tax purposes;

 

(v)         Borrower has not had an “ownership change” (as defined in Section
382 of the Internal Revenue Code of 1986, as amended (the “Tax Code”)) to which
Section 382(a) of the Tax Code applies;

 

(vi)        no event or circumstance that could have a Material Adverse Effect
has occurred since the date of this Agreement; and

 

(vii)       the sum of the outstanding principal amount of all Loans (excluding
PIK Interest added to the Note as principal from time to time in accordance with
the terms of the Note) shall not exceed $10,000,000 after giving effect to such
Loan.

 

4.             REPRESENTATIONS AND WARRANTIES. Borrower hereby represents and
warrants to Lender as follows:

 

A.           Good Standing. Borrower is a corporation, duly organized, validly
existing and in good standing under the laws of the State of Delaware and has
the power and authority to own its property and to carry on its business in each
jurisdiction in which it does business, including the State of Texas.

 

B.           Authority and Compliance. Borrower has full power and authority to
execute and deliver the Loan Documents and to incur and perform the obligations
provided for therein, all of which have been duly authorized by all proper and
necessary action of the appropriate governing body of Borrower. No consent or
approval of any public authority or other third party is required as a condition
to the validity of any Loan Document, and Borrower is in compliance with all
laws and regulatory requirements to which it is subject.

 

C.           No Event of Default. No Default or Event of Default exists.

 

D.           Binding Agreement. This Agreement and the other Loan Documents
executed by Borrower constitute valid and legally binding obligations of
Borrower, enforceable in accordance with their terms.

 

E.           Litigation. Except as described in the Borrower’s publicly filed
documents, there is no proceeding involving Borrower, pending or, to the
knowledge of Borrower, threatened before any court or governmental authority,
agency or arbitration authority, other than the Chapter 11 Case.

 

F.           No Conflicting Agreements. There is no charter, bylaw, stock
provision, partnership agreement or other document pertaining to the
organization, power or authority of Borrower and no provision of any existing
agreement, mortgage, indenture or contract binding on Borrower or affecting
Borrower’s property, which would conflict with or in any way prevent the
execution, delivery or carrying out of the terms of this Agreement and the other
Loan Documents.

 

G.           Ownership of Assets. Borrower, directly or indirectly through its
limited partnership interest in KIP CR P1, LP, has good title to its assets, and
its assets are free and clear of liens, except Permitted Liens (defined below).

 

 5Loan Agreement

 

 

H.           Taxes. All taxes and assessments due and payable by Borrower have
been paid or are being contested in good faith by appropriate proceedings and
Borrower has filed all tax returns which it is required to file.

 

I.           Material Adverse Change. The financial statements of Borrower
delivered to Lender have been prepared in accordance with GAAP applied on a
consistent basis throughout the period involved and fairly present Borrower’s
financial condition, including all material contingent liabilities as of the
date or dates thereof, and there has been no material adverse change in the
financial condition or operations of Borrower since April 30, 2017. All factual
information furnished by Borrower to Lender in connection with this Agreement
and any other Loan Document executed in connection with this Agreement was
accurate and complete on the date on which such information was delivered to
Lender and was not incomplete by the omission of any material fact necessary to
make such information not misleading.

 

J.           Place of Business. Borrower’s place of business (or, if Borrower
has more than one place of business, its chief executive office) is located at
the address listed in Section 9.

 

K.          Environmental. The conduct of Borrower’s business operations and the
condition of Borrower’s property does not violate any federal laws, rules or
ordinances for environmental protection, regulations of the Environmental
Protection Agency, any applicable local or state law, rule, regulation or rule
of common law or any judicial interpretation thereof relating primarily to the
environment or Hazardous Materials.

 

L.           Anti-Corruption Laws. Borrower and its Subsidiaries have conducted
their businesses in compliance with the United States Foreign Corrupt Practices
Act of 1977, the UK Bribery Act 2010, and other similar anti-corruption
legislation in other jurisdictions, and have instituted and maintained policies
and procedures designed to promote and achieve compliance with such laws.
Neither Borrower nor any director, officer, agent, employee or other person
acting on behalf of Borrower is: (a) a person or entity that appears on the
Specially Designated Nationals and Blocked Persons List maintained by the Office
of Foreign Assets Control of the U.S. Department of the Treasury (“OFAC”); or
(b) a person, country or entity with whom a U.S. person (as defined by the laws
and regulations administered by OFAC, 31 C.F.R. Parts 500-598 (the “OFAC
Regulations”)) or a person subject to the jurisdiction of the United States (as
defined by the OFAC Regulations) is otherwise prohibited from dealing under the
OFAC Regulations (a “Sanctions Target”). Borrower is not, directly or
indirectly, owned or controlled by, or under common control with, or, to the
knowledge of Borrower, acting for the benefit of or on behalf of, any Sanctions
Target. Borrower has not exported or re-exported any goods, commodities,
technology or software in any manner that violates any applicable national or
international export control statute, executive order, regulation, rule or
sanction, including the OFAC Regulations, the United States Export
Administration Regulations, 15 C.F.R. Parts 730-774, the International Traffic
in Arms Regulations, 22 C.F.R. Part 120 et seq., the Export Administration Act,
the International Emergency Economic Powers Act, the Trading with the Enemy Act,
the Iran Sanctions Act, the Comprehensive Iran Sanctions, Accountability, and
Divestment Act, the Trade Sanctions Reform and Export Enhancement Act of 2000
(TSRA), or any OFAC Sanctions Program.

 

 6Loan Agreement

 

 

M.           Benefit Plans. Each employee benefit plan, agreement, policy,
practice, commitment, contract or understanding (whether qualified or
unqualified, written or unwritten) that is sponsored, established, maintained,
or contributed to or required to be contributed to by Borrower or for which
Borrower has any liability, contingent or otherwise (each, a “Benefit Plan”),
complies in all material respects, in both form and operation, with all
applicable requirements of ERISA, the Code, and any other applicable state or
federal laws, and with the terms and provisions of the applicable plan document
and all other related documents, policies, and funding arrangements, and
Borrower has performed, in all material respects, each of its obligations under
each Benefit Plan. Borrower has at no time prior to the date hereof sponsored,
contributed to, or had an obligation to contribute to any plan subject to Title
IV of ERISA or Section 412 of the Code, with respect to which Borrower would
have any liability or that could result in a lien attaching to any of Borrower’s
assets. There are no pending, threatened, or potential claims under, related to,
or arising out of any Benefit Plan by or on behalf of any person (other than
ordinary claims for benefits submitted by participants or beneficiaries) or any
governmental authority, and Borrower has no obligation under any Benefit Plan
with respect to which Lender would have any liability or that could result in a
lien attaching to any of Borrower’s assets.

 

N.           Margin Regulations; Investment Company Act. Borrower is not engaged
and will not engage, principally or as one of its important activities, in the
business of purchasing or carrying margin stock (within the meaning of
Regulation U issued by the Board of Governors of the Federal Reserve System of
the United States of America), or extending credit for the purpose of purchasing
or carrying margin stock. None of Borrower, any person or entity controlling
Borrower, or any Subsidiary of Borrower is or is required to be registered as an
“investment company” under the Investment Company Act of 1940.

 

O.           Subsidiaries. As of the date hereof, Borrower has no Subsidiaries
other than those disclosed in the Borrower’s publicly filed documents.

 

P.           Solvency. At the time that each Loan is made hereunder and on the
date of each Permitted Acquisition, Borrower and each of its Subsidiaries is
(and after giving effect to the transactions contemplated by the Loan Documents,
any Permitted Acquisition, and any incurrence of additional indebtedness, will
be) solvent.

 

Q.           Purpose. The proceeds of each Loan will be used solely to finance a
Permitted Acquisition.

 

5.             AFFIRMATIVE COVENANTS. So long as Lender has any obligation to
make Loans hereunder and until full payment and performance of all obligations
of Borrower under the Loan Documents:

 

A.           Financial Statements and Other Information. Borrower will, and will
cause each of its Subsidiaries to, maintain a system of accounting satisfactory
to Lender and in accordance with GAAP applied on a consistent basis throughout
the period involved; permit Lender’s officers or authorized representatives to
visit and inspect the properties of each Lender and examine, audit and make
copies of Lender’s books of account and other records at such reasonable times
and as often as Lender may desire; and pay the reasonable fees and disbursements
of any accountants or other agents of Lender selected by Lender for the
foregoing purposes. Unless written notice of another location is given to
Lender, Borrower’s books and records will be located at Borrower’s office,
located at WeWork c/o Crossroads System, Inc., 11801 Domain Blvd, 3rd Floor,
Austin, Texas 78758. If any of Borrower’s properties, books or records are in
the possession of a third party, Borrower authorizes that third party to permit
Lender or its representatives to have access to perform inspections or audits
and to respond to Lender’s requests for information concerning such properties,
books and records. All financial statements called for below will be prepared in
form and content acceptable to Lender.

 

 7Loan Agreement

 

 

In addition, Borrower will provide to Lender the following:

 

(i)          Within ninety (90) days following Borrower’s fiscal year end,
Borrower’s annual consolidated financial statements, certified and dated by an
authorized financial officer of Borrower. These financial statements must be
audited (with an opinion reasonably satisfactory to Lender) by a Certified
Public Accountant reasonably acceptable to Lender.

 

(ii)         Within thirty (30) days following each calendar month’s end
(including the last calendar month in each fiscal year of Borrower), Borrower’s
monthly consolidated and consolidating financial statements, certified and dated
by an authorized financial officer of Borrower. For the avoidance of doubt,
these financial statements are not required to be audited or reviewed by a
Certified Public Accountant.

 

(iii)        Promptly, upon sending or receipt, copies of any management letters
and correspondence relating to management letters, sent or received by Borrower
to or from Borrower’s auditor.

 

(iv)        Copies of Borrower’s federal income tax return, within fifteen (15)
days following filing, and, if requested by Lender, copies of any extensions of
the filing date.

 

(v)         Promptly after the filing thereof, a true, correct, and complete
copy of each Form 10-K, Form 10-Q, and Form 8-K, if any, filed by or on behalf
of Borrower with the Securities and Exchange Commission (“SEC”) (provided that,
to the extent these documents are publicly available on the SEC’s EDGAR site,
they shall be deemed delivered to Lender in compliance with this Section).

 

(vi)        Within the period(s) provided in (i) and (ii) above, a compliance
certificate of Borrower, in the form attached hereto as Exhibit A, signed by an
authorized financial officer of Borrower setting forth whether there existed as
of the date of such financial statements and whether there exists as of the date
of the certificate, any Default or Event of Default and, if a Default or an
Event of Default exists, specifying the nature thereof and the action Borrower
is taking and proposes to take with respect thereto.

 

(vii)       Promptly upon request, such additional information, reports and
statements respecting the business operations and financial condition of
Borrower from time to time as Lender may reasonably request.

 

B.           Insurance. Borrower will, and will cause each of its Subsidiaries
to, maintain insurance with responsible insurance companies on such of its
properties, in such amounts and against such risks as is customarily maintained
by similar businesses operating in the same vicinity, specifically to include
fire and extended coverage insurance covering all assets, business interruption
insurance, workers’ compensation insurance and liability insurance, all to be
with such companies and in such amounts as are reasonably satisfactory to
Lender.

 

C.           Existence and Compliance. Borrower will, and will cause each of its
Subsidiaries to, maintain its existence, good standing and qualification to do
business, where required and comply with all laws, regulations and governmental
requirements including, without limitation, environmental laws applicable to it
or to any of its property, business operations and transactions.

 

 8Loan Agreement

 

 

D.           Costs, Expenses and Attorneys’ Fees. Borrower will pay to Lender
immediately upon demand after Lender makes the initial Loan hereunder the full
amount of all reasonable costs and expenses (including reasonable attorneys’
fees) incurred by Lender in connection with (a) negotiation and preparation of
this Agreement and each of the Loan Documents, and (b) all other reasonable
costs and attorneys’ fees incurred by Lender for which Borrower is obligated to
reimburse Lender in accordance with the terms of the Loan Documents.

 

E.           Taxes and Other Obligations. Borrower will, and will cause each of
its Subsidiaries to, pay all of its taxes, assessments and other obligations,
including, but not limited to taxes, costs or other expenses arising out of this
transaction, as the same become due and payable, except to the extent the same
are being contested in good faith by appropriate proceedings in a diligent
manner and for which reserves in accordance with GAAP have been established.

 

F.           Maintenance. Borrower will, and will cause each of its Subsidiaries
to, maintain all of its tangible property in good condition and repair and make
all necessary replacements thereof, and preserve and maintain all licenses,
trademarks, privileges, permits, franchises, certificates and the like necessary
for the operation of its business.

 

G.           Environmental Matters. Borrower will, and will cause each of its
Subsidiaries to, immediately advise Lender in writing of (i) any and all
enforcement, cleanup, remedial, removal, or other governmental or regulatory
actions instituted, completed or threatened pursuant to any applicable federal,
state, or local laws, ordinances or regulations relating to any Hazardous
Materials affecting Borrower’s or any of its Subsidiaries’ business operations;
and (ii) all claims made or threatened by any third party against Borrower or
any of its Subsidiaries relating to damages, contribution, cost recovery,
compensation, loss or injury resulting from any Hazardous Materials. Borrower
will immediately notify Lender of any remedial action taken by any Lender with
respect to Borrower’s and its Subsidiaries’ business operations. Borrower agrees
to permit Lender, its agents, contractors and employees to enter and inspect any
of Borrower’s and its Subsidiaries’ places of business or any other property of
Borrower and its Subsidiaries at any reasonable times upon three (3) days prior
notice for the purposes of conducting an environmental investigation and audit
(including taking physical samples) to insure that Borrower and its Subsidiaries
are complying with this covenant and Borrower will reimburse Lender on demand
for the costs of any such environmental investigation and audit. Borrower will
provide Lender, its agents, contractors, employees and representatives with
access to and copies of any and all data and documents relating to or dealing
with any Hazardous Materials used, generated, manufactured, stored or disposed
of by Borrower’s and its Subsidiaries’ business operations within five (5) days
of the request therefore.

 

H.           Anti-Corruption Laws. Borrower will, and will cause each of its
Subsidiaries to, conduct its businesses in compliance with the United States
Foreign Corrupt Practices Act of 1977, the UK Bribery Act 2010, and other
similar anti-corruption legislation in other jurisdictions, and maintain
policies and procedures designed to promote and achieve compliance with such
laws.

 

I.           Benefit Plans. Borrower will, and will cause each of its
Subsidiaries and affiliates to, perform, in all material respects, its
obligations under each Benefit Plan and to operate, administer, and maintain
each Benefit Plan in compliance (both in form and operation) with all applicable
requirements of ERISA, the Code, and any other applicable state or federal law,
and with the terms and provisions of the applicable plan document and any other
related documents, policies, and funding arrangements.

 

 9Loan Agreement

 

 

J.           Subsidiaries. Borrower will, concurrently upon the formation or
acquisition by any Subsidiary after the date hereof (an “After-Acquired
Subsidiary”), cause such After-Acquired Subsidiary: (i) to execute a guaranty in
favor of Lender; and (ii) to execute such Loan Documents as shall be required by
Lender to create first priority liens (subject to Permitted Liens) in favor of
Lender in such After-Acquired Subsidiary’s assets.

 

K.          Use of Proceeds. Borrower will use the proceeds of each Loan solely
to finance a Permitted Acquisition and to pay the costs and expenses described
in Section 5.D above.

 

L.           Further Assurances. Borrower will, and will cause each its
Subsidiaries to, make, execute, and deliver or file or cause the same to be
done, all such notices, additional agreements, mortgages, assignments, financing
statements, or other assurances, and take any and all such other action, as
Lender may, from time to time, deem reasonably necessary or proper in connection
with any of the Loan Documents.

 

6.             NEGATIVE COVENANTS. So long as Lender has any obligation to make
Loans hereunder and until full payment and performance of all obligations of
Borrower under the Loan Documents:

 

A.           Disposal of Assets Outside Ordinary Course of Business. Borrower
will not, and will not permit any of its Subsidiaries to, sell, assign, lease,
transfer or otherwise dispose of any material part of its business or assets,
except in the ordinary course of business.

 

B.           Liens. Borrower will not, and will not permit any of its
Subsidiaries to, grant, suffer or permit any new contractual or non-contractual
lien on or security interest in its assets, except for Permitted Liens. For
purposes hereof, “Permitted Liens” means (i) liens in favor of Lender to secure
the Loans, (ii) pledges or deposits made to secure payment of worker’s
compensation (or to participate in any fund in connection with worker’s
compensation), unemployment insurance, pensions, or social security programs,
(iii) liens imposed by mandatory provisions of law such as for materialmen’s,
mechanic’s, warehousemen’s, and other like liens arising in the ordinary course
of Borrower’s business, securing indebtedness whose payment is not yet due,
(iv) liens for taxes imposed upon a person or upon such person’s income,
profits, or property, if the same are not yet due and payable or if the same are
being contested in good faith and as to which adequate reserves are maintained
in accordance with GAAP, (v) good faith deposits in connection with leases, real
estate bids or contracts (other than contracts involving the borrowing of
money), pledges or deposits to secure (or in lieu of) surety, stay, appeal, or
customs bonds and deposits to secure the payment of taxes, assessments, customs,
duties, or other similar charges, (vi) encumbrances consisting of zoning
restrictions, easements, or other restrictions on the use of real property,
provided that such encumbrances do not impair the use of such property for the
uses intended, and none of which is violated by existing or proposed structures
or land use, and (vii) liens securing indebtedness permitted pursuant to Section
6.C below approved in writing by Lender in its sole discretion.

 

C.           Borrowings. Borrower will not, and will not permit any of its
Subsidiaries to, create, incur, assume or become liable in any manner for any
indebtedness (for borrowed money, deferred payment for the purchase of assets,
swap or derivative obligations, lease payments, as surety or guarantor for the
debt for another, or otherwise) other than (i) indebtedness to Lender,
(ii) normal trade debts incurred in the ordinary course of Borrower’s and its
Subsidiaries’ business and (iii) other indebtedness incurred to finance a
Permitted Acquisition and approved in writing by Lender in its sole discretion.

 

 10Loan Agreement

 

 

D.           Character of Business. Borrower will not, and will not permit any
of its Subsidiaries to, change the general character of business as conducted at
the date hereof, or engage in any type of business not reasonably related to its
business as presently conducted, except for such changes or engagements
resulting directly from a Permitted Acquisition.

 

E.           Change of Management. Borrower will not, and will not permit any of
its Subsidiaries to, make any substantial change in its present executive or
management personnel.

 

F.           Suspend Business. Borrower will not, and will not permit any of its
Subsidiaries to, voluntarily liquidate, dissolve or suspend its business.

 

G.           Negative Pledge Agreements. Borrower will not, and will not permit
any of its Subsidiaries to, enter into any agreement (excluding (i) this
Agreement, (ii) any other Loan Document, (iii) the Securities Purchase
Agreement, and (iv) any other agreement evidencing indebtedness permitted
hereunder and approved in writing by Lender in its sole discretion) prohibiting
the creation or assumption of any lien upon any of its property, revenues, or
assets, whether now owned or hereafter acquired, or the ability of any
Subsidiary of Borrower to make any payments, directly or indirectly, to Borrower
by way of dividends, advances, repayments of loans, repayments of expenses,
accruals, or otherwise.

 

H.           Restricted Payments. Borrower will not, and will not permit any of
its Subsidiaries to, directly or indirectly declare or make, or incur any
liability to make, any dividend, distribution or redemption in respect of its
equity interests; provided, however, that Subsidiaries of Borrower may make
distributions to Borrower.

 

I.           Certain Transactions. Borrower will not, and will not permit any of
its Subsidiaries to, enter into any transaction with, or pay any management fees
to, any affiliate; provided, however, that Borrower and its Subsidiaries may
enter into transactions with affiliates upon terms not less favorable to
Borrower than would be obtainable at the time in comparable, arm’s length
transactions with persons other than affiliates.

 

J.           Fundamental Changes. Borrower will not, and will not permit any of
its Subsidiaries to, become a party to any merger or consolidation, or acquire
by purchase, lease, or otherwise all or substantially all of the assets or stock
of any person (other than pursuant to a Permitted Acquisition), or sell,
transfer, lease, or otherwise dispose of all or any substantial part of its
property or assets or business.

 

K.          Investments. Borrower will not, and will not permit any of its
Subsidiaries to, make or have outstanding any investments in any person, except
for (i) Subsidiaries formed or acquired pursuant to a Permitted Acquisition and
(ii) “cash equivalent” investments as Lender may from time to time approve in
writing.

 

L.           Benefit Plans. Borrower will not, and will not permit any of its
Subsidiaries or affiliates to, create or incur any liability under any employee
benefit plan or other plan maintained by Borrower or any Subsidiary or affiliate
that would be subject to Title IV of ERISA or the minimum funding standards
under the Code.

 

M.           Anti-Corruption Laws. Borrower will not, and will not permit any of
its Subsidiaries to, directly or indirectly use the proceeds of the Loans for
any purpose which would breach the United States Foreign Corrupt Practices Act
of 1977, the UK Bribery Act 2010, and other similar anti-corruption legislation
in other jurisdictions.

 

 11Loan Agreement

 

 

N.           Environmental. Borrower will not, and will not permit any of its
Subsidiaries to, use or permit any other party to use any Hazardous Materials at
any of Borrower’s or any of its Subsidiaries’ places of business or at any other
property owned by Borrower or any of its Subsidiaries except such materials as
are incidental to Borrower’s and its Subsidiaries’ normal course of business,
maintenance and repairs and which are handled in compliance with all applicable
environmental laws.

 

7.             DEFAULT. Any of the following shall constitute an Event of
Default (each, an “Event of Default”):

 

A.           Non-Payment. Borrower fails to pay, when due, any principal,
interest or other amount payable hereunder or under any other Loan Document; or

 

B.            Covenants. Borrower fails to perform or observe any term, covenant
or agreement contained herein or any other Loan Document; or

 

C.           Representations and Warranties. Any representation, warranty,
certification or statement of fact made or deemed made by or on behalf of
Borrower herein, in any other Loan Document, or in any document delivered in
connection herewith or therewith shall be incorrect or misleading when made or
deemed made; or

 

D.           Cross-Default. Borrower or any Subsidiary (i) fails to make any
payment when due (whether by scheduled maturity, required prepayment,
acceleration, demand, or otherwise) in respect of any indebtedness or guarantee
(other than indebtedness hereunder) having an aggregate principal amount
(including undrawn committed or available amounts and including amounts owing to
all creditors under any combined or syndicated credit arrangement) of more than
$10,000, or (ii) fails to observe or perform any other agreement or condition
relating to any such indebtedness or guarantee or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event occurs,
the effect of which default or other event is to cause, or to permit the holder
or holders of such indebtedness or the beneficiary or beneficiaries of such
guarantee (or a trustee or agent on behalf of such holder or holders or
beneficiary or beneficiaries) to cause, with the giving of notice if required,
such indebtedness to be demanded or to become due or to be repurchased, prepaid,
defeased or redeemed (automatically or otherwise), or an offer to repurchase,
prepay, defease or redeem such indebtedness to be made, prior to its stated
maturity, or such guarantee to become payable or cash collateral in respect
thereof to be demanded; or

 

E.           Insolvency Proceedings, Etc. Borrower or any of its Subsidiaries
institutes or consents to the institution of any proceeding under any Debtor
Relief Law, or makes an assignment for the benefit of creditors; or applies for
or consents to the appointment of any receiver, trustee, custodian, conservator,
liquidator, rehabilitator or similar officer for it or for all or any material
part of its property; or any receiver, trustee, custodian, conservator,
liquidator, rehabilitator or similar officer is appointed without the
application or consent of such person and the appointment continues undischarged
or unstayed for sixty (60) days; or any proceeding under any Debtor Relief Law
relating to any such person or to all or any material part of its property is
instituted without the consent of such person and continues undismissed or
unstayed for sixty (60) days, or an order for relief is entered in any such
proceeding, other than in connection with the Chapter 11 Case; or

 

 12Loan Agreement

 

 

F.           Inability to Pay Debts; Attachment. (i) Borrower or any of its
Subsidiaries becomes unable or admits in writing its inability or fails
generally to pay its debts as they become due, or (ii) any writ or warrant of
attachment or execution or similar process is issued or levied against all or
any material part of the property of any such person and is not released,
vacated or fully bonded within thirty (30) days after its issue or levy; or

 

G.           Judgments. There is entered against Borrower or any of its
Subsidiaries (i) one or more final judgments or orders for the payment of money
in an aggregate amount (as to all such judgments or orders) exceeding $10,000,
or (ii) any one or more non-monetary final judgments that have, or could
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect and, in either case, (A) enforcement proceedings are commenced by
any creditor upon such judgment or order, or (B) there is a period of ten (10)
consecutive days during which a stay of enforcement of such judgment, by reason
of a pending appeal or otherwise, is not in effect; or

 

H.           Invalidity of Loan Documents. Any provision of any Loan Document,
at any time after its execution and delivery and for any reason other than as
expressly permitted hereunder or thereunder or satisfaction in full of all
obligations of Borrower under the Loan Documents, ceases to be in full force and
effect; or any person contests in any manner the validity or enforceability of
any provision of any Loan Document; or Borrower denies that it has any or
further liability or obligation under any Loan Document, or purports to revoke,
terminate or rescind any provision of any Loan Document; or

 

I.           Change of Control. The occurrence of any event or series of events
by which:

 

(i)          other than by Lender and its affiliates, any “person” or “group”
(as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange
Act of 1934, but excluding any employee benefit plan of such person or its
Subsidiaries, and any person or entity acting in its capacity as trustee, agent
or other fiduciary or administrator of any such plan) becomes the “beneficial
owner” (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of
1934, except that a person or group shall be deemed to have “beneficial
ownership” of all securities that such person or group has the right to acquire,
whether such right is exercisable immediately or only after the passage of time
(such right, an “option right”)), directly or indirectly, of twenty percent
(20%) or more of the equity securities of Borrower entitled to vote for members
of the board of directors or equivalent governing body of Borrower on a fully
diluted basis (and taking into account all such securities that such person or
group has the right to acquire pursuant to any option right);

 

(ii)         Borrower merges into or consolidates with any other person, or any
person merges into or consolidates with Borrower and, after giving effect to
such transaction, the stockholders of Borrower immediately prior to such
transaction own less than 80% of the aggregate voting power of Borrower or the
successor entity of such transaction;

 

(iii)        Borrower sells or transfers all or substantially all of its assets
to another person and the stockholders of Borrower immediately prior to such
transaction own less than 80% of the aggregate voting power of the acquiring
entity immediately after the transaction;

 

 13Loan Agreement

 

 

(iv)        during any period of twelve (12) consecutive months, a majority of
the members of the board of directors or other equivalent governing body of
Borrower cease to be composed of individuals (A) who were members of that board
or equivalent governing body on the first (1st) day of such period, (B) whose
election or nomination to that board or equivalent governing body was approved
by individuals referred to in clause (A) above constituting at the time of such
election or nomination at least a majority of that board or equivalent governing
body or (C) whose election or nomination to that board or other equivalent
governing body was approved by individuals referred to in clauses (A) and (B)
above constituting at the time of such election or nomination at least a
majority of that board or equivalent governing body;

 

(v)         the passage of thirty (30) days from the date upon which any person
or two or more persons acting in concert (other than Lender and its affiliates)
shall have acquired by contract or otherwise, or shall have entered into a
contract or arrangement that, upon consummation thereof, will result in its or
their acquisition of the power to exercise, directly or indirectly, a
controlling influence over the management or policies of Borrower, or control
over the equity securities of Borrower entitled to vote for members of the board
of directors or equivalent governing body of Borrower on a fully diluted basis
(and taking into account all such securities that such person or group has the
right to acquire pursuant to any option right) representing twenty percent (20%)
or more of the combined voting power of such securities; or

 

(vi)        the execution by Borrower of an agreement to which Borrower is a
party or by which it is bound, providing for any of the events set forth in
clauses (i) through (v) above; or

 

J.           Material Adverse Effect. There occurs any event or circumstance
that could reasonably be expected to have a Material Adverse Effect.

 

8.             REMEDIES UPON DEFAULT. If an Event of Default shall occur, Lender
shall have all rights, powers and remedies available under each of the Loan
Documents as well as all rights and remedies available at law or in equity,
including but not limited to, the right to declare Borrower in default and
require Borrower to repay Borrower’s entire debt immediately and without prior
notice. Upon the occurrence of an actual or deemed entry of an order for relief
with respect to Borrower under the Bankruptcy Code of the United States of
America, other than in connection with the Chapter 11 Case, the unpaid principal
amount of the Loans and all interest and other amounts shall automatically
become due and payable without further act of Lender.

 

9.             NOTICES. All notices, requests or 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 the other party at the following
address:

 

Borrower:

WeWork c/o Crossroads Systems, Inc.

11801 Domain Blvd., 3rd Floor
Austin, Texas 78758

 

Lender:

210/CRDS Investment, LLC

8214 Westchester Drive, Suite 950

Dallas, Texas 75225

 

or to such other address as any party may designate by written notice to the
other party. Each such notice, request and demand shall be deemed given or made
as follows:

 

 14Loan Agreement

 

 

A.           If sent by mail, upon the earlier of the date of receipt or five
(5) days after deposit in the U.S. Mail, first class postage prepaid;

 

B.           If sent by any other means, upon delivery.

 

10.           MISCELLANEOUS. Borrower and Lender further covenant and agree as
follows, without limiting any requirement of any other Loan Document:

 

A.           Cumulative Rights and No Waiver. Each and every right granted to
Lender under any Loan Document, or allowed it by law or equity shall be
cumulative of each other and may be exercised in addition to any and all other
rights of Lender, and no delay in exercising any right shall operate as a waiver
thereof, nor shall any single or partial exercise by Lender of any right
preclude any other or future exercise thereof or the exercise of any other
right. Borrower expressly waives any presentment, demand, protest, notice of
demand, notice of protest, notice of nonpayment, notice of dishonor or other
notice of any kind, including but not limited to notice of intent to accelerate
and notice of acceleration. No notice to or demand on Borrower in any case
shall, of itself, entitle Borrower to any other or future notice or demand in
similar or other circumstances.

 

B.           Applicable Law. This Agreement and the rights and obligations of
the parties hereunder shall be governed by and interpreted in accordance with
the laws of Texas and applicable United States federal law.

 

C.           Amendment. No modification, consent, amendment or waiver of any
provision of this Agreement, nor consent to any departure by Borrower therefrom,
shall be effective unless the same shall be in writing and signed by an officer
of Lender, and then shall be effective only in the specified instance and for
the purpose for which given. This Agreement is binding upon Borrower, their
successors and assigns, and inures to the benefit of Lender its successors and
assigns; however, no assignment or other transfer of Borrower’s rights or
obligations hereunder shall be made or be effective without Lender’s prior
written consent, nor shall it relieve Borrower of any obligations hereunder.
There is no third party beneficiary of this Agreement.

 

D.           Documents. All documents, certificates and other items required
under this Agreement to be executed and/or delivered to Lender shall be in form
and content satisfactory to Lender and its counsel.

 

E.           Partial Invalidity. The unenforceability or invalidity of any
provision of this Agreement shall not affect the enforceability or validity of
any other provision herein and the invalidity or unenforceability of any
provision of any Loan Document to any person or circumstance shall not affect
the enforceability or validity of such provision as it may apply to other
persons or circumstances.

 

 15Loan Agreement

 

 

F.           Indemnification. Borrower shall indemnify, defend and hold Lender
and its successors and assigns harmless from and against any and all claims,
demands, suits, losses, damages, assessments, fines, penalties, costs or other
expenses (including reasonable attorneys’ fees and court costs) arising from or
in any way related to any of the transactions contemplated hereby, including,
but not limited to, actual or threatened damage to the environment, agency costs
of investigation, personal injury or death, or property damage, due to a release
or alleged release of Hazardous Materials, arising from Borrower’s business
operations, any other property owned by Borrower or in the surface or ground
water arising from Borrower’s business operations, or gaseous emissions arising
from Borrower’s business operations or any other condition existing or arising
from Borrower’s business operations resulting from the use or existence of
Hazardous Materials, whether such claim proves to be true or false and in all
cases, whether or not caused by or arising, in whole or in part, out of the
comparative, contributory or sole negligence of Lender or its successors and
assigns. Borrower further agrees that its indemnity obligations shall include,
but are not limited to, liability for damages resulting from the personal injury
or death of an employee of Borrower, regardless of whether Borrower has paid the
employee under the workers’ compensation laws of any state or other similar
federal or state legislation for the protection of employees. The term “property
damage” as used in this paragraph includes, but is not limited to, damage to any
real or personal property of Borrower, Lender, and of any third parties.
Borrower’s obligations under this paragraph shall survive the repayment of the
Loans and any deed in lieu of foreclosure or foreclosure of any deed to secure
debt, deed of trust, security agreement or mortgage securing the Loans.

 

G.           Participations. Lender shall have the right to enter into
participation agreements with other lenders with respect to the Loan Documents
and grant participations in the loan documents. Each actual or proposed
participant shall be entitled to receive all information received by Lender
regarding the creditworthiness of Borrower.

 

H.           Survivability. All covenants, agreements, representations and
warranties made herein or in the other Loan Documents shall survive the making
of the Loans and shall continue in full force and effect so long as any Loan is
outstanding.

 

I.           Waiver of Jury Trial. The parties irrevocably and voluntarily waive
any right they may have to a trial by jury in respect of the resolution of any
controversies or claims between Borrower and Lender, whether arising in
contract, tort or by statute, including but not limited to controversies or
claims that arise out of or relate to: (i) this Agreement (including any
renewals, extensions or modifications); or (ii) any document related to this
Agreement. This provision is a material inducement for the parties entering into
this Agreement.

 

J.           Submission to Jurisdiction. BORROWER IRREVOCABLY AND
UNCONDITIONALLY AGREES THAT IT WILL NOT COMMENCE ANY ACTION, LITIGATION OR
PROCEEDING OF ANY KIND OR DESCRIPTION, WHETHER IN LAW OR EQUITY, WHETHER IN
CONTRACT OR IN TORT OR OTHERWISE, AGAINST LENDER OR ANY RELATED PARTY OF THE
FOREGOING IN ANY WAY RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR
THE TRANSACTIONS RELATING HERETO OR THERETO, IN ANY FORUM OTHER THAN THE COURTS
OF THE STATE OF TEXAS SITTING IN DALLAS COUNTY AND OF THE UNITED STATES DISTRICT
COURT OF THE NORTHERN DISTRICT OF TEXAS, AND ANY APPELLATE COURT FROM ANY
THEREOF, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY SUBMITS
TO THE JURISDICTION OF SUCH COURTS AND AGREES THAT ALL CLAIMS IN RESPECT OF ANY
SUCH ACTION, LITIGATION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH TEXAS
STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH
FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY
SUCH ACTION, LITIGATION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN
OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY
LAW. NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY
RIGHT THAT LENDER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST BORROWER OR ITS PROPERTIES
IN THE COURTS OF ANY JURISDICTION.

 

 16Loan Agreement

 

 

K.          CONTROLLING DOCUMENT. To the extent that this Agreement conflicts
with or is in any way incompatible with any other Loan Document, the Note shall
control over any other document, and if the Note does not address an issue, then
each other document shall control to the extent that it deals most specifically
with an issue.

 

L.           NO ORAL AGREEMENT. THIS WRITTEN LOAN AGREEMENT AND THE OTHER LOAN
DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS
OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

 

[Signature Page(s) Follow]

 

 17Loan Agreement

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed under seal by their duly authorized representatives as of the date
first above written.

 

  LENDER:       210/CRDS INVESTMENT, LLC         By: 210 Capital, LLC,     a
Delaware limited liability company,     the sole member

 

  By:       Robert H. Alpert     Manager         By:       C. Clark Webb    
Manager

 

  BORROWER:       CROSSROADS SYSTEMS, INC.         By:     Name: [_____]  
Title: [_____]

 

Signature Page to Loan Agreement

 

 

 

 

Exhibit A

 

Form of Compliance Certificate

 

[DATE]

 

Financial Statement Date: ________, ____

 

To:210/CRDS Investment, LLC, as Lender

 

Ladies and Gentlemen:

 

Reference is made to that certain Loan Agreement, dated as of [_______], 2017
(as amended, restated, extended, supplemented or otherwise modified in writing
from time to time, the “Agreement;” the terms defined therein being used herein
as therein defined), executed by and between 210/CRDS Investment, LLC, a Texas
limited liability company (“Lender”), and Crossroads Systems, Inc., a Delaware
corporation (“Borrower”).

 

The undersigned financial officer of Borrower hereby certifies as of the date
hereof that he/she is the ___________________________________ of Borrower, and
that, as such, he/she is authorized to execute and deliver this Compliance
Certificate to Lender on behalf of Borrower, and that:

 

[Use following paragraph 1 for fiscal year-end financial statements]

 

1.          Borrower has delivered the year-end audited financial statements
required by Section 5.A(i) of the Agreement for the fiscal year of Borrower
ended as of the above financial statement date, together with the report and
opinion of an independent certified public accountant reasonably acceptable to
Lender required by such section.

 

[Use following paragraph 1 for calendar month-end financial statements]

 

1.          Borrower has delivered the unaudited financial statements required
by Section 5.A(ii) of the Agreement for the calendar month ended as of the above
financial statement date. Such financial statements fairly present the financial
condition, results of operations and cash flows of Borrower as at such date and
for such period, subject only to normal year-end audit adjustments and the
absence of footnotes.

 

[select one:]

 

2.          [As of the date of the financial statements no Default or Event of
Default existed under the Agreement and as of the date hereof no Default or
Event of Default under the Agreement exists.]

 

—or—

 

2.          [As of the date of the date hereof the following Defaults or Events
of Default exist and for each such Default or Event of Default, Borrower is
taking and proposes to take the following actions:

 

Default or Event of Default   Remedial Action [_____]   [_____]

 

[Signature Page Follows]

 

 

 

 

IN WITNESS WHEREOF, the undersigned has executed this Compliance Certificate as
of the date first written above.

 

  BORROWER:       CROSSROADS SYSTEMS, INC.         By:       Name:       Title:
 

 

 

 

 

Promissory Note

 

Date: [__________], 2017
Amount $10,000,000

 

Lender:

 

210/CRDS Investment, LLC

8214 Westchester Drive, Suite 950

Dallas, Texas 75225

 

Borrower:

 

Crossroads Systems, Inc.

11000 North Mopac Expressway, Suite 150

Austin, Texas 78759

 

 

FOR VALUE RECEIVED, the undersigned Borrower unconditionally promises to pay to
the order of Lender, its successors and assigns, without setoff, at its offices
indicated at the beginning of this Promissory Note (this “Note”), or at such
other place as may be designated by Lender, the lesser of (i) Ten Million
Dollars ($10,000,000) plus any PIK Interest (defined below), or (ii) the unpaid
amount of Loans as may be advanced hereunder from time to time, in immediately
available funds, together with interest computed daily on the outstanding
principal balance hereunder (including PIK Interest added to this Note as
principal from time to time in accordance with the terms of this Note), at an
annual interest rate, and in accordance with the payment schedule, indicated
below.

 

This Note is executed in connection with that certain Loan Agreement dated the
date hereof, by and between Borrower and Lender (as modified, amended, renewed,
extended or restated from time to time, the “Loan Agreement”). Capitalized terms
used, but not defined, herein shall have the meanings given to such terms in the
Loan Agreement.

 

1.             Rate. Subject to Section 8 below, the interest rate is a rate per
annum equal to ten percent (10%) if paid in cash and equal to twelve (12%) if
paid in kind in accordance with Section 2. Interest will be calculated on the
basis of actual number of days (including the first day but excluding the last
day) elapsed but computed as if each calendar year consisted of 360 days (unless
the calculation would result in an interest rate greater than the Maximum Rate
(as defined in Section 10 below), in which event interest will be calculated on
the basis of a year of 365 or 366 days, as the case may be). All interest rate
determinations and calculations by Lender are conclusive and binding absent
manifest error.

 

2.             Payment Schedule. The principal of and interest on each Loan
shall be due and payable as follows:

 

(a)          Interest shall be due and payable quarterly in arrears, commencing
on the last Business Day of the calendar quarter following the making of such
Loan, and thereafter, on last Business Day of each succeeding calendar quarter
during the term of such Loan (each such date being an “Interest Accrual Date”)
and on the date that is five (5) years after the making of such Loan (each, an
“Advance Maturity Date”); and

 

(b)          The entire unpaid principal balance of each Loan, and all accrued
unpaid interest on such Loan shall be due and payable in full on the applicable
Advance Maturity Date;

 

 

 

 

provided, however, that, on any Interest Accrual Date, Borrower may elect, in
its discretion, that the amount of interest on this Note due on such Interest
Accrual Date (“PIK Interest”) be paid by an automatic advance under this Note on
such Interest Accrual Date in an amount equal to the amount of such PIK
Interest. PIK Interest shall be added to and become a part of the unpaid
principal balance of this Note and shall bear interest as provided for herein.
“Business Day” means any day other than a Saturday, Sunday, or day on which
national banks are authorized to be closed under the laws of the State of Texas.

 

3.          Revolving Feature. Subject to the terms and conditions set forth in
the Loan Agreement, Borrower may borrow, repay and reborrow hereunder. Lender
shall incur no liability for its refusal to advance funds based upon its
determination that any conditions of such further advances have not been met.
Lender’s records of the amounts borrowed from time to time hereunder shall be
conclusive proof thereof.

 

4.          Payments. All payments on the Note shall be made to Lender at its
principal office at 8214 Westchester Drive, Suite 950, Dallas, Texas 75225 in
federal or other immediately available funds. Payments shall be applied first to
accrued interest and then to unpaid principal. If any payment is scheduled to
become due and payable on a day which is not a Business Day, then such payment
shall instead become due and payable on the immediately following Business Day
and interest on the principal portion of such payment shall be payable at the
then applicable rate during such extension.

 

5.          Waivers, Consents and Covenants. Borrower, any indorser or guarantor
hereof, or any other party hereto (individually an “Obligor” and collectively
“Obligors”) and each of them jointly and severally: (a) waive presentment,
demand, protest, notice of demand, notice of intent to accelerate, notice of
acceleration of maturity, notice of protest, notice of nonpayment, notice of
dishonor, and any other notice required to be given under the law to any Obligor
in connection with the delivery, acceptance, performance, default or enforcement
of this Note, any indorsement or guaranty of this Note, or any other documents
executed in connection with this Note or any other Loan Document; (b) consent to
all delays, extensions, renewals or other modifications of this Note or the Loan
Documents, or waivers of any term hereof or of the Loan Documents, or release or
discharge by Lender of any of Obligors, or release, substitution or exchange of
any security for the payment hereof, or the failure to act on the part of
Lender, or any indulgence shown by Lender (without notice to or further assent
from any of Obligors), and agree that no such action, failure to act or failure
to exercise any right or remedy by Lender shall in any way affect or impair the
obligations of any Obligors or be construed as a waiver by Lender of, or
otherwise affect, any of Lender’s rights under this Note, under any indorsement
or guaranty of this Note or under any of the Loan Documents; and (c) agree to
pay, on demand, all costs and expenses of collection or defense of this Note or
of any indorsement or guaranty hereof and/or the enforcement or defense of
Lender’s rights with respect to, or the administration, supervision,
preservation, or protection of, or realization upon, any property securing
payment hereof, including, without limitation, reasonable attorneys’ fees,
including fees related to any suit, mediation or arbitration proceeding, out of
court payment agreement, trial, appeal, bankruptcy proceedings or other
proceeding, in such amount as may be determined reasonable by any arbitrator or
court, whichever is applicable.

 

6.          Prepayments. Borrower may make prepayments of principal in whole or
in part at any time without premium or penalty. Any such prepayment shall be
made together with payment of interest accrued on the amount of principal being
prepaid through the date of such prepayment.

 

7.          Events of Default. Any Event of Default under and as defined in the
Loan Agreement shall be a default hereunder.

 

 

 

 

8.          Remedies upon Default. Whenever there is a default under this Note
(a) the entire balance outstanding hereunder and all other obligations of any
Obligor to Lender (however acquired or evidenced) shall, at the option of
Lender, become immediately due and payable and any obligation of Lender to
permit further borrowing under this Note shall immediately cease and terminate,
and/or (b) to the extent permitted by law, the rate of interest on the unpaid
principal shall be increased at Lender’s discretion up to the Maximum Rate, or
if none, eighteen percent (18%) per annum (the “Default Rate”). The provisions
herein for a Default Rate shall not be deemed to extend the time for any payment
hereunder or to constitute a “grace period” giving Obligors a right to cure any
default. At Lender’s option, any accrued and unpaid interest, fees or charges
may, for purposes of computing and accruing interest on a daily basis after the
due date of the Note or any installment thereof, be deemed to be a part of the
principal balance, and interest shall accrue on a daily compounded basis after
such date at the Default Rate provided in this Note until the entire outstanding
balance of principal and interest is paid in full. Upon a default under this
Note, Lender is hereby authorized at any time, at its option and without notice
or demand, to set off and charge against any deposit accounts of any Obligor (as
well as any money, instruments, securities, documents, chattel paper, credits,
claims, demands, income and any other property, rights and interests of any
Obligor), which at any time shall come into the possession or custody or under
the control of Lender or any of its agents, affiliates or correspondents, any
and all obligations due hereunder. Additionally, Lender shall have all rights
and remedies available under each of the Loan Documents, as well as all rights
and remedies available at law or in equity.

 

9.          Non-Waiver. The failure at any time of Lender to exercise any of its
options or any other rights hereunder shall not constitute a waiver thereof, nor
shall it be a bar to the exercise of any of its options or rights at a later
date. All rights and remedies of Lender shall be cumulative and may be pursued
singly, successively or together, at the option of Lender. The acceptance by
Lender of any partial payment shall not constitute a waiver of any default or of
any of Lender’s rights under this Note. No waiver of any of its rights
hereunder, and no modification or amendment of this Note, shall be deemed to be
made by Lender unless the same shall be in writing, duly signed on behalf of
Lender; each such waiver shall apply only with respect to the specific instance
involved, and shall in no way impair the rights of Lender or the obligations of
Obligors to Lender in any other respect at any other time.

 

10.         Limitation. Notwithstanding any provision of this Note or any other
agreement or commitment between Borrower and Lender, whether written or oral,
express or implied, Lender shall never be entitled to charge, receive, or
collect, nor shall amounts received hereunder be credited so that Lender shall
be paid, as interest a sum greater than interest at the Maximum Rate. It is the
intention of the parties that the Note, and all instruments securing the payment
of the Note or executed or delivered in connection therewith, shall comply with
applicable law. If Lender ever contracts for, charges, receives or collects
anything of value which is deemed to be interest under applicable law, and if
the occurrence of any circumstance or contingency, whether acceleration of
maturity of the Note, prepayment of the Note, delay in advancing proceeds of the
Note, or any other event, should cause such interest to exceed the maximum
lawful amount, any amount which exceeds interest at the Maximum Rate shall be
applied to the reduction of the unpaid principal balance of the Note or any
other indebtedness owed to Lender by Borrower, and if the Note and such other
indebtedness are paid in full, any remaining excess shall be paid to Borrower.
In determining whether the interest exceeds interest at the Maximum Rate, the
total amount of interest shall be spread, prorated and amortized throughout the
entire term of the Note until its payment in full. The term “Maximum Rate” as
used in this Note means the maximum nonusurious rate of interest per annum
permitted by whichever of applicable United States federal law or Texas law
permits the higher interest rate, including to the extent permitted by
applicable law, any amendments thereof hereafter or any new law hereafter coming
into effect to the extent a higher Maximum Rate is permitted thereby. To the
extent, if any, that Chapter 303 of the Texas Finance Code, as amended, (the
“Act”) is relevant to Lender for purposes of determining the Maximum Rate, the
parties elect to determine the Maximum Rate under the Act pursuant to the
“weekly ceiling” from time to time in effect, as referred to and defined in
§ 303.001-303.016 of the Act; subject, however, to any right Lender subsequently
may have under applicable law to change the method of determining the Maximum
Rate.

 

 

 

 

11.         Applicable Law, Venue and Jurisdiction. Borrower agrees that this
Note shall be deemed to have been made in the State of Texas at LENDER’s address
indicated at the beginning of this Note and shall be governed by, and construed
in accordance with, the laws of the State of Texas and is performable in dallas,
dallas county, texas. In any litigation in connection with or to enforce this
Note or any ENDORSEMENT or guaranty of this Note or any Loan Documents,
Obligors, and each of them, irrevocably consent to and confer personal
jurisdiction on the courts of the State of Texas or the United States courts
located within the State of Texas. Nothing contained herein shall, however,
prevent LENDER from bringing any action or exercising any rights within any
other state or jurisdiction or from obtaining personal jurisdiction by any other
means available under applicable law.

 

12.         Partial Invalidity. The unenforceability or invalidity of any
provision of this Note shall not affect the enforceability or validity of any
other provision herein and the invalidity or unenforceability of any provision
of this Note or of the Loan Documents to any person or circumstance shall not
affect the enforceability or validity of such provision as it may apply to other
persons or circumstances.

 

13.         Binding Effect. This Note shall be binding upon and inure to the
benefit of Borrower, Obligors and Lender and their respective successors,
assigns, heirs and personal representatives, provided, however, that no
obligations of Borrower or Obligors hereunder can be assigned without prior
written consent of Lender.

 

14.         NOTICE OF FINAL AGREEMENT. THIS WRITTEN PROMISSORY NOTE and the
other loan documents REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES, AND MAY
NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.

 

[Remainder of page intentionally blank. Signature page follows.]

 

 

 

 

Borrower:       CROSSROADS SYSTEMS, Inc.           By:         Name: [_____]    
Title: [_____]  

 

Signature Page to Promissory Note

 

 

 

 

Lender:       210/CRDS Investment, LLC         By: 210 Capital, LLC,     a
Delaware limited liability company,     the sole member  

 

  By:         Robert H. Alpert       Manager             By:         C. Clark
Webb       Manager  

 

Signature Page to Promissory Note

 

 

 

 

EXHIBIT B

 

Form of Registration Rights Agreement

 

 

 

 

REGISTRATION RIGHTS AGREEMENT

 

This Registration Rights Agreement (this “Agreement”) is made and entered into
as of [__________], 2017 among Crossroads Systems, Inc., a Delaware corporation
(the “Company”), and the persons identified on Schedule A hereto (collectively,
the “Investors” and, each individually, an “Investor”).

 

WHEREAS, the Company and the Investors are parties to a Securities Purchase
Agreement, dated as of [__________], 2017 (the “Purchase Agreement”), pursuant
to which the Investors are purchasing 1,427,314 shares of Common Stock, par
value $0.001 per share, of the Company; and

 

WHEREAS, in connection with the consummation of the transactions contemplated by
the Purchase Agreement, and pursuant to the terms of the Purchase Agreement, the
parties hereto desire to enter into this Agreement in order to grant certain
registration rights to the Investors as set forth below.

 

NOW, THEREFORE, in consideration of the foregoing and the mutual and dependent
covenants hereinafter set forth, the parties hereto agree as follows:

 

1.          Defined Terms. As used in this Agreement, the following terms shall
have the following meanings:

 

“Affiliate” of a Person means any other Person that directly, or indirectly
through one or more intermediaries, controls or is controlled by, or is under
common control with, such Person. The term “control” (including the terms
“controlling”, “controlled by” and “under common control with”) means the
possession, direct or indirect, of the power to direct or cause the direction of
the management and policies of a Person, whether through the ownership of voting
securities, by contract, or otherwise.

 

“Agreement” has the meaning set forth in the preamble.

 

“Alternative Public Offering Entities” has the meaning set forth in Section 11.

 

“Board” means the board of directors (or any successor governing body) of the
Company.

 

“Commission” means the Securities and Exchange Commission or any other federal
agency administering the Securities Act and the Exchange Act at the time.

 

“Common Stock” means the common stock, par value $0.001 per share, of the
Company and any other shares of stock issued or issuable with respect thereto
(whether by way of a stock dividend or stock split or in exchange for or upon
conversion of such shares or otherwise in connection with a combination of
shares, distribution, recapitalization, merger, consolidation, other corporate
reorganization or other similar event with respect to the Common Stock).

 

 

 

 

“Company” has the meaning set forth in the preamble and includes the Company’s
successors by merger, acquisition, reorganization or otherwise.

 

“Controlling Person” has the meaning set forth in Section 5(q).

 

“Demand Registration” has the meaning set forth in Section 2(b).

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.

 

“Governmental Authority” means any federal, state, local or foreign government
or political subdivision thereof, or any agency or instrumentality of such
government or political subdivision, or any self-regulated organization or other
non-governmental regulatory authority or quasi-governmental authority (to the
extent that the rules, regulations or orders of such organization or authority
have the force of law), or any arbitrator, court or tribunal of competent
jurisdiction.

 

“Inspectors” has the meaning set forth in Section 5(h).

 

“Investors” has the meaning set forth in the preamble.

 

“Long-Form Registration” has the meaning set forth in Section 2(a).

 

“Person” means an individual, corporation, partnership, joint venture, limited
liability company, Governmental Authority, unincorporated organization, trust,
association or other entity.

 

“Piggyback Registration” has the meaning set forth in Section 3(a).

 

“Piggyback Registration Statement” has the meaning set forth in Section 3(a).

 

“Piggyback Shelf Registration Statement” has the meaning set forth in Section
3(a).

 

“Piggyback Shelf Takedown” has the meaning set forth in Section 3(a).

 

“Prospectus” means the prospectus or prospectuses included in any Registration
Statement (including, without limitation, a prospectus that includes any
information previously omitted from a prospectus filed as part of an effective
Registration Statement in reliance on Rule 430A or Rule 430B under the
Securities Act or any successor rule thereto), as amended or supplemented by any
prospectus supplement, including any Shelf Supplement, with respect to the terms
of the offering of any portion of the Registrable Securities covered by such
Registration Statement and by all other amendments and supplements to the
prospectus, including post-effective amendments and all material incorporated by
reference in such prospectus or prospectuses.

 

 2 

 

 

“Public Offering” means the first offering of the Common Stock after the date
hereof pursuant to an effective Registration Statement on Form S-1 filed under
the Securities Act (other than a registration (i) pursuant to a Registration
Statement on Form S-8 (or other registration solely relating to an offering or
sale to employees or directors of the Company pursuant to any employee stock
plan or other employee benefit arrangement), (ii) pursuant to a Registration
Statement on Form S-4 (or similar form that relates to a transaction subject to
Rule 145 under the Securities Act or any successor rule thereto), or (iii) in
connection with any dividend or distribution reinvestment or similar plan).

 

“Purchase Agreement” has the meaning set forth in the recitals.

 

“Records” has the meaning set forth in Section 5(h).

 

“Registrable Securities” means (a) any shares of Common Stock beneficially owned
by the Investors, and (b) any shares of Common Stock issued or issuable with
respect to any shares described in subsection (a) above by way of a stock
dividend or stock split or in exchange for or upon conversion of such shares or
otherwise in connection with a combination of shares, distribution,
recapitalization, merger, consolidation, other reorganization or other similar
event with respect to the Common Stock (it being understood that, for purposes
of this Agreement, a Person shall be deemed to be a holder of Registrable
Securities whenever such Person has the right to then acquire or obtain from the
Company any Registrable Securities, whether or not such acquisition has actually
been effected).

 

“Registration Date” means the date after a Public Offering on which the
suspension of the Company’s filing obligations under Section 15(d) of the
Exchange Act ends.

 

“Registration Statement” means any registration statement of the Company,
including the Prospectus, amendments and supplements (including Shelf
Supplements) to such registration statement, including post-effective
amendments, all exhibits and all material incorporated by reference in such
registration statement.

 

“Rule 144” means Rule 144 under the Securities Act or any successor rule
thereto.

 

“Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.

 

“Selling Expenses” means all underwriting discounts, selling commissions and
stock transfer taxes applicable to the sale of Registrable Securities, and fees
and disbursements of counsel for any holder of Registrable Securities, except
for the fees and disbursements of counsel for the holders of Registrable
Securities required to be paid by the Company pursuant to Section 6.

 

“Shares” means the shares of Common Stock issued to the Investors pursuant to
the Purchase Agreement.

 

“Shelf Registration” has the meaning set forth in Section 2(c).

 

“Shelf Registration Statement” has the meaning set forth in Section 2(c).

 

 3 

 

 

“Shelf Supplement” has the meaning set forth in Section 2(d).

 

“Shelf Takedown” has the meaning set forth in Section 2(d).

 

“Short-Form Registration” has the meaning set forth in Section 2(b).

 

2.             Demand Registration.

 

(a)          At any time beginning one hundred eighty (180) days after the
Closing Date, holders of a majority of the Registrable Securities then
outstanding may request registration under the Securities Act of all or any
portion of their Registrable Securities pursuant to a Registration Statement on
Form S-1 or any successor form thereto (each, a “Long-Form Registration”). Each
request for a Long-Form Registration shall specify the number of Registrable
Securities requested to be included in the Long-Form Registration. Upon receipt
of any such request, the Company shall promptly (but in no event later than five
(5) days following receipt thereof) deliver notice of such request to all other
holders of Registrable Securities who shall then have five (5) days from the
date such notice is given to notify the Company in writing of their desire to be
included in such registration. The Company shall prepare and file with (or
confidentially submit to) the Commission a Registration Statement on Form S-1 or
any successor form thereto covering all of the Registrable Securities that the
holders thereof have requested to be included in such Long-Form Registration
within sixty (60) days after the date on which the initial request is given and
shall use its best efforts to cause such Registration Statement to be declared
effective by the Commission as soon as practicable thereafter. The Company shall
not be required to effect a Long-Form Registration more than two (2) times for
the holders of Registrable Securities as a group; provided, that a Registration
Statement shall not count as a Long-Form Registration requested under this
Section 2(a) unless and until it has become effective and the holders requesting
such registration are able to register and sell at least a majority of the
Registrable Securities requested to be included in such registration.

 

(b)          After the Registration Date, the Company shall use its best efforts
to qualify and remain qualified to register the offer and sale of securities
under the Securities Act pursuant to a Registration Statement on Form S-3 or any
successor form thereto. At such time as the Company shall have qualified for the
use of a Registration Statement on Form S-3 or any successor form thereto, the
holders of Registrable Securities shall have the right to request an unlimited
number of registrations under the Securities Act of all or any portion of their
Registrable Securities pursuant to a Registration Statement on Form S-3 or any
similar short-form Registration Statement (each, a “Short-Form Registration”
and, collectively with each Long-Form Registration and Shelf Registration (as
defined below), a “Demand Registration”). Each request for a Short-Form
Registration shall specify the number of Registrable Securities requested to be
included in the Short-Form Registration. Upon receipt of any such request, the
Company shall promptly (but in no event later than five (5) days following
receipt thereof) deliver notice of such request to all other holders of
Registrable Securities who shall then have five (5) days from the date such
notice is given to notify the Company in writing of their desire to be included
in such registration. The Company shall prepare and file with (or confidentially
submit to) the Commission a Registration Statement on Form S-3 or any successor
form thereto covering all of the Registrable Securities that the holders thereof
have requested to be included in such Short-Form Registration within thirty (30)
days after the date on which the initial request is given and shall use its best
efforts to cause such Registration Statement to be declared effective by the
Commission as soon as practicable thereafter.

 

 4 

 

 

(c)          At such time as the Company shall have qualified for the use of a
Registration Statement on Form S-3 or the then appropriate form for an offering
to be made on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act or any successor rule thereto (a “Shelf Registration Statement”),
the holders of Registrable Securities shall have the right to request
registration under the Securities Act of all or any portion of their Registrable
Securities for an offering on a delayed or continuous basis pursuant to Rule 415
under the Securities Act or any successor rule thereto (a “Shelf Registration”).
Each request for a Shelf Registration shall specify the number of Registrable
Securities requested to be included in the Shelf Registration. Upon receipt of
any such request, the Company shall promptly (but in no event later than five
(5) days following receipt thereof) deliver notice of such request to all other
holders of Registrable Securities who shall then have five (5) days from the
date such notice is given to notify the Company in writing of their desire to be
included in such registration. The Company shall prepare and file with (or
confidentially submit to) the Commission a Shelf Registration Statement covering
all of the Registrable Securities that the holders thereof have requested to be
included in such Shelf Registration within ten (10) days after the date on which
the initial request is given and shall use its best efforts to cause such Shelf
Registration Statement to be declared effective by the Commission as soon as
practicable thereafter.

 

(d)          The Company shall not be obligated to effect any Demand
Registration within three (3) months after the effective date of a previous
Demand Registration, Shelf Takedown or a previous Piggyback Registration in
which holders of Registrable Securities were permitted to register the offer and
sale under the Securities Act, and actually sold, at least a majority of the
shares of Registrable Securities requested to be included therein. The Company
may postpone for up to ninety (90) days the filing or effectiveness of a
Registration Statement for a Demand Registration or a supplement (a “Shelf
Supplement”) for the purpose of effecting an offering pursuant to Rule 415 under
the Securities Act or any successor rule thereto (a “Shelf Takedown”) if the
Board determines in its reasonable good faith judgment that such Demand
Registration or Shelf Takedown would (i) materially interfere with a significant
acquisition, corporate organization, financing, securities offering or other
similar transaction involving the Company; (ii) require premature disclosure of
material information that the Company has a bona fide business purpose for
preserving as confidential; or (iii) render the Company unable to comply with
requirements under the Securities Act or Exchange Act; provided, that in such
event the holders of a majority of the Registrable Securities initiating such
Demand Registration or Shelf Takedown shall be entitled to withdraw such request
and, if such request for a Demand Registration is withdrawn, such Demand
Registration shall not count as one of the permitted Demand Registrations
hereunder and the Company shall pay all registration expenses in connection with
such registration. The Company may delay a Demand Registration or Shelf Takedown
hereunder only once in any period of 12 consecutive months.

 

(e)          If the holders of the Registrable Securities initially requesting a
Demand Registration or Shelf Takedown elect to distribute the Registrable
Securities covered by their request in an underwritten offering, they shall so
advise the Company as a part of their request made pursuant to Section 2(a),
Section 2(b), or Section 2(c) and the Company shall include such information in
its notice to the other holders of Registrable Securities. The Company shall
select the investment banking firm or firms to act as the managing underwriter
or underwriters in connection with such offering, which underwriter must be
reasonably acceptable to the holders of a majority of the Registrable Securities
initially requesting the offering.

 

 5 

 

 

(f)          The Company shall not include in any Demand Registration or Shelf
Takedown any securities which are not Registrable Securities without the prior
written consent of the holders of a majority of the Registrable Securities
initially requesting such Demand Registration or Shelf Takedown. If a Demand
Registration or Shelf Takedown involves an underwritten offering and the
managing underwriter of the requested Demand Registration or Shelf Takedown
advises the Company and the holders of Registrable Securities in writing that in
its reasonable and good faith opinion the number of shares of Common Stock
proposed to be included in the Demand Registration or Shelf Takedown, including
all Registrable Securities and all other shares of Common Stock proposed to be
included in such underwritten offering, exceeds the number of shares of Common
Stock which can be sold in such underwritten offering and/or the number of
shares of Common Stock proposed to be included in such Demand Registration or
Shelf Takedown would adversely affect the price per share of the Common Stock
proposed to be sold in such underwritten offering, the Company shall include in
such Demand Registration or Shelf Takedown (i) first, the shares of Common Stock
that the holders of Registrable Securities propose to sell, and (ii) second, the
shares of Common Stock proposed to be included therein by any other Persons
(including shares of Common Stock to be sold for the account of the Company
and/or other holders of Common Stock) allocated among such Persons in such
manner as they may agree. If the managing underwriter determines that less than
all of the Registrable Securities proposed to be sold can be included in such
offering, then the Registrable Securities that are included in such offering
shall be allocated pro rata among the respective holders thereof on the basis of
the number of Registrable Securities owned by each such holder.

 

(g)          Upon receipt of any Demand Registration, the Company shall not file
any other Registration Statement without the consent of the holders of a
majority of the Registrable Securities requesting registration until the
consummation of the sale of Registrable Securities contemplated by the
applicable Demand Registration; provided that the Company shall be permitted to
file any Registration Statement on Form S-8.

 

3.             Piggyback Registration.

 

(a)          Whenever the Company proposes to register the offer and sale of any
shares of its Common Stock under the Securities Act (other than a registration
(i) pursuant to a Registration Statement on Form S-8 (or other registration
solely relating to an offering or sale to employees or directors of the Company
pursuant to any employee stock plan or other employee benefit arrangement), (ii)
pursuant to a Registration Statement on Form S-4 (or similar form that relates
to a transaction subject to Rule 145 under the Securities Act or any successor
rule thereto), or (iii) in connection with any dividend or distribution
reinvestment or similar plan), whether for its own account or for the account of
one or more stockholders of the Company, and the form of Registration Statement
(a “Piggyback Registration Statement”) to be used may be used for any
registration of Registrable Securities (a “Piggyback Registration”), the Company
shall give prompt written notice (in any event no later than fifteen (15) days
prior to the filing of such Registration Statement) to the holders of
Registrable Securities of its intention to effect such a registration and,
subject to Section 3(b) and Section 3(c), shall include in such registration all
Registrable Securities with respect to which the Company has received written
requests for inclusion from the holders of Registrable Securities within five
(5) days after the Company’s notice has been given to each such holder. A
Piggyback Registration shall not be considered a Demand Registration for
purposes of Section 2. If any Piggyback Registration Statement pursuant to which
holders of Registrable Securities have registered the offer and sale of
Registrable Securities is a Registration Statement on Form S-3 or the then
appropriate form for an offering to be made on a delayed or continuous basis
pursuant to Rule 415 under the Securities Act or any successor rule thereto (a
“Piggyback Shelf Registration Statement”), such holder(s) shall have the right,
but not the obligation, to be notified of and to participate in any offering
under such Piggyback Shelf Registration Statement (a “Piggyback Shelf
Takedown”).

 

 6 

 

 

(b)          If a Piggyback Registration or Piggyback Shelf Takedown is
initiated as a primary underwritten offering on behalf of the Company and the
managing underwriter advises the Company and the holders of Registrable
Securities (if any holders of Registrable Securities have elected to include
Registrable Securities in such Piggyback Registration or Piggyback Shelf
Takedown) in writing that in its reasonable and good faith opinion the number of
shares of Common Stock proposed to be included in such registration or takedown,
including all Registrable Securities and all other shares of Common Stock
proposed to be included in such underwritten offering, exceeds the number of
shares of Common Stock which can be sold in such offering and/or that the number
of shares of Common Stock proposed to be included in any such registration or
takedown would adversely affect the price per share of the Common Stock to be
sold in such offering, the Company shall include in such registration or
takedown (i) first, the shares of Common Stock that the Company proposes to
sell; (ii) second, the shares of Common Stock requested to be included therein
by holders of Registrable Securities, allocated pro rata among all such holders
on the basis of the number of Registrable Securities owned by each such holder
or in such manner as they may otherwise agree; and (iii) third, the shares of
Common Stock requested to be included therein by holders of Common Stock other
than holders of Registrable Securities, allocated among such holders in such
manner as they may agree; provided, that in any event the holders of Registrable
Securities shall be entitled to register the offer and sale or distribute at
least thirty percent (30%) of the securities to be included in any such
registration or takedown.

 

(c)          If a Piggyback Registration or Piggyback Shelf Takedown is
initiated as an underwritten offering on behalf of a holder of Common Stock
other than Registrable Securities, and the managing underwriter advises the
Company in writing that in its reasonable and good faith opinion the number of
shares of Common Stock proposed to be included in such registration or takedown,
including all Registrable Securities and all other shares of Common Stock
proposed to be included in such underwritten offering, exceeds the number of
shares of Common Stock which can be sold in such offering and/or that the number
of shares of Common Stock proposed to be included in any such registration or
takedown would adversely affect the price per share of the Common Stock to be
sold in such offering, the Company shall include in such registration or
takedown (i) first, the shares of Common Stock requested to be included therein
by the holder(s) requesting such registration or takedown and by the holders of
Registrable Securities, allocated pro rata among all such holders on the basis
of the number of shares of Common Stock other than the Registrable Securities
(on a fully diluted, as converted basis) and the number of Registrable
Securities, as applicable, owned by all such holders or in such manner as they
may otherwise agree; and (ii) second, the shares of Common Stock requested to be
included therein by other holders of Common Stock, allocated among such holders
in such manner as they may agree.

 

 7 

 

 

(d)          If any Piggyback Registration or Piggyback Shelf Takedown is
initiated as a primary underwritten offering on behalf of the Company, the
Company shall select the investment banking firm or firms to act as the managing
underwriter or underwriters in connection with such offering. Each holder of
Registrable Securities proposing to distribute their Registrable Securities
through such underwritten offering shall (together with the Company) enter into
an underwriting agreement in customary form with the underwriter or underwriters
selected for such underwriting.

 

4.             Lock-up Agreement. Each holder of Registrable Securities agrees
that in connection with an Public Offering, and upon the request of the managing
underwriter in such offering, such holder shall not, without the prior written
consent of such managing underwriter, during the period commencing on the
effective date of such registration and ending on the date specified by such
managing underwriter (such period not to exceed one hundred eighty (180) days),
(a) offer, pledge, sell, contract to sell, grant any option or contract to
purchase, purchase any option or contract to sell, hedge the beneficial
ownership of or otherwise dispose of, directly or indirectly, any shares of
Common Stock or any securities convertible into, exercisable for or exchangeable
for shares of Common Stock held immediately before the effectiveness of the
Registration Statement for such offering, or (b) enter into any swap or other
arrangement that transfers to another, in whole or in part, any of the economic
consequences of ownership of such securities, whether any such transaction
described in clause (a) or (b) above is to be settled by delivery of Common
Stock or such other securities, in cash or otherwise. The foregoing provisions
of this Section 4 shall not apply to sales of Registrable Securities to be
included in such offering pursuant to Section 2(a), Section 2(b), Section 2(c)
or Section 3(a), and shall be applicable to the holders of Registrable
Securities only if all officers and directors of the Company and all
stockholders owning more than five percent (5%) of the Company’s outstanding
Common Stock are subject to the same restrictions. Each holder of Registrable
Securities agrees to execute and deliver such other agreements as may be
reasonably requested by the Company or the managing underwriter which are
consistent with the foregoing or which are necessary to give further effect
thereto. Notwithstanding anything to the contrary contained in this Section 4,
each holder of Registrable Securities shall be released, pro rata, from any
lock-up agreement entered into pursuant to this Section 4 in the event and to
the extent that the managing underwriter or the Company permit any discretionary
waiver or termination of the restrictions of any lock-up agreement pertaining to
any officer, director or holder of greater than five percent (5%) of the
outstanding Common Stock.

 

5.             Registration Procedures. If and whenever the holders of
Registrable Securities request that the offer and sale of any Registrable
Securities be registered under the Securities Act or any Registrable Securities
be distributed in a Shelf Takedown pursuant to the provisions of this Agreement,
the Company shall use its best efforts to effect the registration of the offer
and sale of such Registrable Securities under the Securities Act in accordance
with the intended method of disposition thereof, and pursuant thereto the
Company shall as soon as practicable and as applicable:

 

 8 

 

 

(a)          subject to Section 2(a), Section 2(b) and Section 2(c), prepare and
file with the Commission a Registration Statement covering such Registrable
Securities and use its best efforts to cause such Registration Statement to be
declared effective;

 

(b)          in the case of a Long-Form Registration or a Short-Form
Registration, prepare and file with the Commission such amendments,
post-effective amendments and supplements to such Registration Statement and the
Prospectus used in connection therewith as may be necessary to keep such
Registration Statement effective until all of such Registrable Securities have
been disposed of and to comply with the provisions of the Securities Act with
respect to the disposition of such Registrable Securities in accordance with the
intended methods of disposition set forth in such Registration Statement;

 

(c)          Within a reasonable time before filing such Registration Statement,
Prospectus or amendments or supplements thereto with the Commission, furnish to
one counsel selected by holders of a majority of such Registrable Securities
copies of such documents proposed to be filed, which documents shall be subject
to the review, comment and approval of such counsel;

 

(d)          notify each selling holder of Registrable Securities, promptly
after the Company receives notice thereof, of the time when such Registration
Statement has been declared effective or a supplement, including a Shelf
Supplement, to any Prospectus forming a part of such Registration Statement has
been filed with the Commission;

 

(e)          furnish to each selling holder of Registrable Securities such
number of copies of the Prospectus included in such Registration Statement
(including each preliminary Prospectus) and any supplement thereto, including a
Shelf Supplement (in each case including all exhibits and documents incorporated
by reference therein), and such other documents as such seller may request in
order to facilitate the disposition of the Registrable Securities owned by such
seller;

 

(f)          use its best efforts to register or qualify such Registrable
Securities under such other securities or “blue sky” laws of such jurisdictions
as any selling holder requests and do any and all other acts and things which
may be necessary or advisable to enable such holders to consummate the
disposition in such jurisdictions of the Registrable Securities owned by such
holders; provided, that the Company shall not be required to qualify generally
to do business, subject itself to general taxation or consent to general service
of process in any jurisdiction where it would not otherwise be required to do so
but for this Section 5(f);

 

(g)          notify each selling holder of such Registrable Securities, at any
time when a Prospectus relating thereto is required to be delivered under the
Securities Act, of the happening of any event that would cause the Prospectus
included in such Registration Statement to contain an untrue statement of a
material fact or omit any fact necessary in order to make the statements made
therein, in light of the circumstances under which they were made, not
misleading, and, at the request of any such holder, the Company shall prepare a
supplement or amendment to such Prospectus so that, as thereafter delivered to
the purchasers of such Registrable Securities, such Prospectus shall not contain
an untrue statement of a material fact or omit to state any fact necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading;

 

 9 

 

 

(h)          make available for inspection by any selling holder of Registrable
Securities, any underwriter participating in any disposition pursuant to such
Registration Statement and any attorney, accountant or other agent retained by
any such holder or underwriter (collectively, the “Inspectors”), all financial
and other records, pertinent corporate documents and properties of the Company
(collectively, the “Records”), and cause the Company’s officers, directors and
employees to supply all information requested by any such Inspector in
connection with such Registration Statement;

 

(i)          provide a transfer agent and registrar (which may be the same
entity) for all such Registrable Securities not later than the effective date of
such registration;

 

(j)          use its best efforts to cause such Registrable Securities to be
listed on each securities exchange on which the Common Stock is then listed or,
if the Common Stock is not then listed, on a national securities exchange
selected by the holders of a majority of such Registrable Securities;

 

(k)          in connection with an underwritten offering, enter into such
customary agreements (including underwriting and lock-up agreements in customary
form) and take all such other customary actions as the holders of such
Registrable Securities or the managing underwriter of such offering request in
order to expedite or facilitate the disposition of such Registrable Securities
(including, without limitation, making appropriate officers of the Company
available to participate in “road show” and other customary marketing activities
(including one-on-one meetings with prospective purchasers of the Registrable
Securities));

 

(l)          otherwise use its best efforts to comply with all applicable rules
and regulations of the Commission and make available to its stockholders an
earnings statement (in a form that satisfies the provisions of Section 11(a) of
the Securities Act and Rule 158 under the Securities Act or any successor rule
thereto) no later than thirty (30) days after the end of the 12-month period
beginning with the first day of the Company’s first full fiscal quarter after
the effective date of such Registration Statement, which earnings statement
shall cover said 12-month period, and which requirement will be deemed to be
satisfied if the Company timely files complete and accurate information on Forms
10-K, 10-Q and 8-K under the Exchange Act and otherwise complies with Rule 158
under the Securities Act or any successor rule thereto;

 

(m)          furnish to each selling holder of Registrable Securities and each
underwriter, if any, with (i) a written legal opinion of the Company’s outside
counsel, dated the closing date of the offering, in form and substance as is
customarily given in opinions of the Company’s counsel to underwriters in
underwritten registered offerings; and (ii) on the date of the applicable
Prospectus, on the effective date of any post-effective amendment to the
applicable Registration Statement and at the closing of the offering, dated the
respective dates of delivery thereof, a “comfort” letter signed by the Company’s
independent certified public accountants in form and substance as is customarily
given in accountants’ letters to underwriters in underwritten registered
offerings;

 

 10 

 

 

(n)          without limiting Section 5(f), use its best efforts to cause such
Registrable Securities to be registered with or approved by such other
governmental agencies or authorities as may be necessary by virtue of the
business and operations of the Company to enable the holders of such Registrable
Securities to consummate the disposition of such Registrable Securities in
accordance with their intended method of distribution thereof;

 

(o)          notify the holders of Registrable Securities promptly of any
request by the Commission for the amending or supplementing of such Registration
Statement or Prospectus or for additional information;

 

(p)          advise the holders of Registrable Securities, promptly after it
shall receive notice or obtain knowledge thereof, of the issuance of any stop
order by the Commission suspending the effectiveness of such Registration
Statement or the initiation or threatening of any proceeding for such purpose
and promptly use its best efforts to prevent the issuance of any stop order or
to obtain its withdrawal at the earliest possible moment if such stop order
should be issued;

 

(q)          permit any holder of Registrable Securities which holder, in its
sole and exclusive judgment, might be deemed to be an underwriter or a
“controlling person” (within the meaning of Section 15 of the Securities Act and
Section 20 of the Exchange Act) (a “Controlling Person”) of the Company, to
participate in the preparation of such Registration Statement and to require the
insertion therein of language, furnished to the Company in writing, which in the
reasonable judgment of such holder and its counsel should be included;

 

(r)          cooperate with the holders of the Registrable Securities to
facilitate the timely preparation and delivery of certificates representing the
Registrable Securities to be sold pursuant to such Registration Statement or
Rule 144 free of any restrictive legends and representing such number of shares
of Common Stock and registered in such names as the holders of the Registrable
Securities may reasonably request a reasonable period of time prior to sales of
Registrable Securities pursuant to such Registration Statement or Rule 144;

 

(s)          not later than the effective date of such Registration Statement,
provide a CUSIP number for all Registrable Securities and provide the applicable
transfer agent with printed certificates for the Registrable Securities which
are in a form eligible for deposit with The Depository Trust Company;

 

(t)          take no direct or indirect action prohibited by Regulation M under
the Exchange Act; provided, that, to the extent that any prohibition is
applicable to the Company, the Company will take all reasonable action to make
any such prohibition inapplicable; and

 

(u)          otherwise use its best efforts to take all other steps necessary to
effect the registration of such Registrable Securities contemplated hereby.

 

 11 

 

 

6.             Expenses. All expenses (other than Selling Expenses) incurred by
the Company in complying with its obligations pursuant to this Agreement and in
connection with the registration and disposition of Registrable Securities shall
be paid by the Company, including, without limitation, all (i) registration and
filing fees (including, without limitation, any fees relating to filings
required to be made with, or the listing of any Registrable Securities on, any
securities exchange or over-the-counter trading market on which the Registrable
Securities are listed or quoted); (ii) underwriting expenses (other than fees,
commissions or discounts); (iii) expenses of any audits incident to or required
by any such registration; (iv) fees and expenses of complying with securities
and “blue sky” laws (including, without limitation, fees and disbursements of
counsel for the Company in connection with “blue sky” qualifications or
exemptions of the Registrable Securities); (v) printing expenses; (vi)
messenger, telephone and delivery expenses; (vii) fees and expenses of the
Company’s counsel and accountants; (viii) Financial Industry Regulatory
Authority, Inc. filing fees (if any); and (ix) fees and expenses of one counsel
for the holders of Registrable Securities participating in such registration as
a group (selected by, in the case of a registration under Section 2(a), the
holders of a majority of the Registrable Securities initially requesting such
registration, and, in the case of all other registrations hereunder, the holders
of a majority of the Registrable Securities included in the registration). In
addition, the Company shall be responsible for all of its internal expenses
incurred in connection with the consummation of the transactions contemplated by
this Agreement (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties) and the expense of
any annual audits. All Selling Expenses relating to the offer and sale of
Registrable Securities registered under the Securities Act pursuant to this
Agreement shall be borne and paid by the holders of such Registrable Securities,
in proportion to the number of Registrable Securities included in such
registration for each such holder.

 

 12 

 

 

7.             Indemnification.

 

(a)          The Company shall indemnify and hold harmless, to the fullest
extent permitted by law, each holder of Registrable Securities, such holder’s
officers, directors, managers, members, partners, stockholders and Affiliates,
each underwriter, broker or any other Person acting on behalf of such holder of
Registrable Securities and each other Controlling Person, if any, who controls
any of the foregoing Persons, against all losses, claims, actions, damages,
liabilities and expenses, joint or several, to which any of the foregoing
Persons may become subject under the Securities Act or otherwise, insofar as
such losses, claims, actions, damages, liabilities or expenses arise out of or
are based upon any untrue or alleged untrue statement of a material fact
contained in any Registration Statement, Prospectus, preliminary Prospectus,
free writing prospectus (as defined in Rule 405 under the Securities Act or any
successor rule thereto) or any amendment thereof or supplement thereto or any
omission or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein (in the case of a Prospectus,
preliminary Prospectus or free writing prospectus, in light of the circumstances
under which they were made) not misleading; and shall reimburse such Persons for
any legal or other expenses reasonably incurred by any of them in connection
with investigating or defending any such loss, claim, action, damage or
liability, except insofar as the same are caused by or contained in any
information furnished in writing to the Company by such holder expressly for use
therein or by such holder’s failure to deliver a copy of the Registration
Statement, Prospectus, preliminary Prospectus, free writing prospectus (as
defined in Rule 405 under the Securities Act or any successor rule thereto) or
any amendments or supplements thereto (if the same was required by applicable
law to be so delivered) after the Company has furnished such holder with a
sufficient number of copies of the same prior to any written confirmation of the
sale of Registrable Securities. This indemnity shall be in addition to any
liability the Company may otherwise have.

 

(b)          In connection with any registration in which a holder of
Registrable Securities is participating, each such holder shall furnish to the
Company in writing such information as the Company reasonably requests for use
in connection with any such Registration Statement or Prospectus and, to the
extent permitted by law, shall indemnify and hold harmless, the Company, each
director of the Company, each officer of the Company who shall sign such
Registration Statement, each underwriter, broker or other Person acting on
behalf of the holders of Registrable Securities and each Controlling Person who
controls any of the foregoing Persons against any losses, claims, actions,
damages, liabilities or expenses resulting from any untrue or alleged untrue
statement of material fact contained in the Registration Statement, Prospectus,
preliminary Prospectus, free writing prospectus (as defined in Rule 405 under
the Securities Act or any successor rule thereto) or any amendment thereof or
supplement thereto or any omission or alleged omission of a material fact
required to be stated therein or necessary to make the statements therein (in
the case of a Prospectus, preliminary Prospectus or free writing prospectus, in
light of the circumstances under which they were made) not misleading, but only
to the extent that such untrue statement or omission is contained in any
information so furnished in writing by such holder; provided, that the
obligation to indemnify shall be several, not joint and several, for each holder
and shall not exceed an amount equal to the net proceeds (after underwriting
fees, commissions or discounts) actually received by such holder from the sale
of Registrable Securities pursuant to such Registration Statement. This
indemnity shall be in addition to any liability the selling holder may otherwise
have.

 

 13 

 

 

(c)          Promptly after receipt by an indemnified party of notice of the
commencement of any action involving a claim referred to in this Section 7, such
indemnified party shall, if a claim in respect thereof is made against an
indemnifying party, give written notice to the latter of the commencement of
such action. The failure of any indemnified party to notify an indemnifying
party of any such action shall not (unless such failure shall have a material
adverse effect on the indemnifying party) relieve the indemnifying party from
any liability in respect of such action that it may have to such indemnified
party hereunder. In case any such action is brought against an indemnified
party, the indemnifying party shall be entitled to participate in and to assume
the defense of the claims in any such action that are subject or potentially
subject to indemnification hereunder, jointly with any other indemnifying party
similarly notified to the extent that it may wish, with counsel reasonably
satisfactory to such indemnified party, and after written notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party shall not be responsible for any legal
or other expenses subsequently incurred by the indemnified party in connection
with the defense thereof; provided, that, if (i) any indemnified party shall
have reasonably concluded that there may be one or more legal or equitable
defenses available to such indemnified party which are additional to or conflict
with those available to the indemnifying party, or that such claim or litigation
involves or could have an effect upon matters beyond the scope of the indemnity
provided hereunder, or (ii) such action seeks an injunction or equitable relief
against any indemnified party or involves actual or alleged criminal activity,
the indemnifying party shall not have the right to assume the defense of such
action on behalf of such indemnified party without such indemnified party’s
prior written consent (but, without such consent, shall have the right to
participate therein with counsel of its choice) and such indemnifying party
shall reimburse such indemnified party and any Controlling Person of such
indemnified party for that portion of the fees and expenses of any counsel
retained by the indemnified party which is reasonably related to the matters
covered by the indemnity provided hereunder. If the indemnifying party is not
entitled to, or elects not to, assume the defense of a claim, it shall not be
obligated to pay the fees and expenses of more than one counsel for all parties
indemnified by such indemnifying party with respect to such claim, unless in the
reasonable judgment of any indemnified party a conflict of interest may exist
between such indemnified party and any other of such indemnified parties with
respect to such claim. In such instance, the conflicting indemnified parties
shall have a right to retain one separate counsel, chosen by the holders of a
majority of the Registrable Securities included in the registration, at the
expense of the indemnifying party.

 

(d)          If the indemnification provided for hereunder is held by a court of
competent jurisdiction to be unavailable to an indemnified party with respect to
any loss, claim, damage, liability or action referred to herein, then the
indemnifying party, in lieu of indemnifying such indemnified party hereunder,
shall contribute to the amounts paid or payable by such indemnified party as a
result of such loss, claim, damage, liability or action in such proportion as is
appropriate to reflect the relative fault of the indemnifying party on the one
hand and of the indemnified party on the other in connection with the statements
or omissions which resulted in such loss, claim, damage, liability or action as
well as any other relevant equitable considerations; provided, that the maximum
amount of liability in respect of such contribution shall be limited, in the
case of each holder of Registrable Securities, to an amount equal to the net
proceeds (after underwriting fees, commissions or discounts) actually received
by such seller from the sale of Registrable Securities effected pursuant to such
registration. The relative fault of the indemnifying party and of the
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the indemnifying party or by the indemnified party, whether the
violation of the Securities Act or any other similar federal or state securities
laws or rule or regulation promulgated thereunder applicable to the Company and
relating to action or inaction required of the Company in connection with any
applicable registration, qualification or compliance was perpetrated by the
indemnifying party or the indemnified party and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The parties agree that it would not be just and equitable
if contribution pursuant hereto were determined by pro rata allocation or by any
other method or allocation which does not take account of the equitable
considerations referred to herein. No Person guilty or liable of fraudulent
misrepresentation within the meaning of Section 11(f) of the Securities Act
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation.

 

 14 

 

 

8.             Participation in Underwritten Registrations. No Person may
participate in any registration hereunder which is underwritten unless such
Person (a) agrees to sell such Person’s securities on the basis provided in any
underwriting arrangements approved by the Person or Persons entitled hereunder
to approve such arrangements and (b) completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents
reasonably required under the terms of such underwriting arrangements; provided,
that no holder of Registrable Securities included in any underwritten
registration shall be required to make any representations or warranties to the
Company or the underwriters (other than representations and warranties regarding
such holder, such holder’s ownership of its shares of Common Stock to be sold in
the offering and such holder’s intended method of distribution) or to undertake
any indemnification obligations to the Company or the underwriters with respect
thereto, except as otherwise provided in Section 7.

 

9.             Rule 144 Compliance. With a view to making available to the
holders of Registrable Securities the benefits of Rule 144 and any other rule or
regulation of the Commission that may at any time permit a holder to sell
securities of the Company to the public without registration, from and after the
Registration Date, the Company shall:

 

(a)          make and keep public information available, as those terms are
understood and defined in Rule 144, at all times after the Registration Date;

 

(b)          use best efforts to file with the Commission in a timely manner all
reports and other documents required of the Company under the Securities Act and
the Exchange Act, at any time after the Registration Date; and

 

(c)          furnish to any holder so long as the holder owns Registrable
Securities, promptly upon request, a written statement by the Company as to its
compliance with the reporting requirements of Rule 144 and of the Securities Act
and the Exchange Act, a copy of the most recent annual or quarterly report of
the Company, and such other reports and documents so filed or furnished by the
Company as such holder may request in connection with the sale of Registrable
Securities without registration.

 

 15 

 

 

10.         Preservation of Rights. Without the prior written consent of the
holders of a majority of the Registrable Securities, the Company shall not (a)
grant any registration rights, or (b) enter into any agreement, take any action,
or permit any change to occur, with respect to its securities that violates or
subordinates the rights expressly granted to the holders of Registrable
Securities in this Agreement.

 

11.         Alternative Public Offering Entities. In the event that the Company
elects to effect an underwritten registered offering of equity securities of any
subsidiary or parent of the Company (collectively, “Alternative Public Offering
Entities”) rather than the equity securities of the Company, whether as a result
of a reorganization of the Company or otherwise, the Investors and the Company
shall cause the Alternative Public Offering Entity to enter into an agreement
with the Investors that provides the Investors with registration rights with
respect to the equity securities of the Alternative Public Offering Entity that
are substantially the same as, and in any event no less favorable in the
aggregate to, the registration rights provided to the Investors in this
Agreement.

 

12.         Termination. As to any particular Registrable Securities, such
securities shall cease to be Registrable Securities when (i) a registration
statement registering such securities under the Securities Act has been declared
effective and such securities have been sold or otherwise transferred by the
holder thereof pursuant to such effective registration statement, (ii) such
securities shall have been distributed pursuant to Rule 144 under the Securities
Act, (iii) such securities shall have been otherwise transferred in a
transaction in which the transferor’s rights under this Agreement are not
assigned to the transferee of such securities, (iv) such securities are no
longer outstanding or (v) such securities may be sold without restriction under
the Securities Act. This Agreement shall terminate and be of no further force or
effect when there shall no longer be any Registrable Securities outstanding;
provided, that the provisions of Section 6 and Section 7 shall survive any such
termination.

 

13.         Notices. All notices, requests, consents, claims, demands, waivers
and other communications hereunder shall be in writing and shall be deemed to
have been given (a) when delivered by hand (with written confirmation of
receipt); (b) when received by the addressee if sent by a nationally recognized
overnight courier (receipt requested); (c) on the date sent by facsimile or
e-mail of a PDF document (with confirmation of transmission) if sent during
normal business hours of the recipient, and on the next Business Day if sent
after normal business hours of the recipient; or (d) on the third day after the
date mailed, by certified or registered mail, return receipt requested, postage
prepaid. Such communications must be sent to the respective parties at the
addresses indicated below (or at such other address for a party as shall be
specified in a notice given in accordance with this Section 13).

 

If to the Company:

 

WeWork c/o Crossroads Systems, Inc.

11801 Domain Blvd., 3rd Floor

Austin, Texas 78758

Telephone: 512-928-7335

E-mail: rcoleman@crossroads.com

Attention: Richard K. Coleman, Jr.

   

with a copy to:

 

Olshan Frome Wolosky LLP

1325 Avenue of the Americas

New York, New York 10019

Facsimile: 212-451-2222

E-mail: afinerman@olshanlaw.com

Attention: Adam W. Finerman, Esq.

 

If to any Investor, to such Investor’s address as set forth on Schedule A
hereto.

 

 16 

 

 

14.         Entire Agreement. This Agreement, together with the Purchase
Agreement and any related exhibits and schedules thereto, constitutes the sole
and entire agreement of the parties to this Agreement with respect to the
subject matter contained herein, and supersedes all prior and contemporaneous
understandings and agreements, both written and oral, with respect to such
subject matter. Notwithstanding the foregoing, in the event of any conflict
between the terms and provisions of this Agreement and those of the Purchase
Agreement, the terms and conditions of this Agreement shall control.

 

15.         Successor and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective successors
and permitted assigns. Each Investor may assign its rights hereunder to any
purchaser or transferee of Registrable Securities; provided, that such purchaser
or transferee shall, as a condition to the effectiveness of such assignment, be
required to execute a counterpart to this Agreement agreeing to be treated as an
Investor whereupon such purchaser or transferee shall have the benefits of, and
shall be subject to the restrictions contained in, this Agreement as if such
purchaser or transferee was originally included in the definition of an Investor
herein and had originally been a party hereto.

 

16.         No Third-Party Beneficiaries. This Agreement is for the sole benefit
of the parties hereto and their respective successors and permitted assigns and
nothing herein, express or implied, is intended to or shall confer upon any
other Person any legal or equitable right, benefit or remedy of any nature
whatsoever, under or by reason of this Agreement; provided, however, the parties
hereto hereby acknowledge that the Persons set forth in Section 7 are express
third-party beneficiaries of the obligations of the parties hereto set forth in
Section 7.

 

17.         Headings. The headings in this Agreement are for reference only and
shall not affect the interpretation of this Agreement.

 

18.         Amendment, Modification and Waiver. The provisions of this Agreement
may only be amended, modified, supplemented or waived with the prior written
consent of the Company and the holders of a majority of the Registrable
Securities. No waiver by any party or parties shall operate or be construed as a
waiver in respect of any failure, breach or default not expressly identified by
such written waiver, whether of a similar or different character, and whether
occurring before or after that waiver. Except as otherwise set forth in this
Agreement, no failure to exercise, or delay in exercising, any right, remedy,
power or privilege arising from this Agreement shall operate or be construed as
a waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege.

 

 17 

 

 

19.         Severability. If any term or provision of this Agreement is invalid,
illegal or unenforceable in any jurisdiction, such invalidity, illegality or
unenforceability shall not affect any other term or provision of this Agreement
or invalidate or render unenforceable such term or provision in any other
jurisdiction. Upon such determination that any term or other provision is
invalid, illegal or unenforceable, the parties hereto shall negotiate in good
faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in a mutually acceptable manner in order that the
transactions contemplated hereby be consummated as originally contemplated to
the greatest extent possible.

 

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

 

21.         Governing Law; Submission to Jurisdiction. This Agreement shall be
governed by and construed in accordance with the internal laws of the State of
Texas without giving effect to any choice or conflict of law provision or rule
(whether of the State of Texas or any other jurisdiction). Any legal suit,
action or proceeding arising out of or based upon this Agreement or the
transactions contemplated hereby may be instituted in the federal courts of the
United States or the courts of the State of Texas in each case located in the
city of Dallas and County of Dallas, and each party irrevocably submits to the
exclusive jurisdiction of such courts in any such suit, action or proceeding.
Service of process, summons, notice or other document by mail to such party’s
address set forth herein shall be effective service of process for any suit,
action or other proceeding brought in any such court. The parties irrevocably
and unconditionally waive any objection to the laying of venue of any suit,
action or any proceeding in such courts and irrevocably waive and agree not to
plead or claim in any such court that any such suit, action or proceeding
brought in any such court has been brought in an inconvenient forum.

 

22.         Waiver of Jury Trial. Each party acknowledges and agrees that any
controversy which may arise under this Agreement is likely to involve
complicated and difficult issues and, therefore, each such party irrevocably and
unconditionally waives any right it may have to a trial by jury in respect of
any legal action arising out of or relating to this Agreement or the
transactions contemplated hereby. Each party to this Agreement certifies and
acknowledges that (a) no representative of any other party has represented,
expressly or otherwise, that such other party would not seek to enforce the
foregoing waiver in the event of a legal action, (b) such party has considered
the implications of this waiver, (c) such party makes this waiver voluntarily,
and (d) such party has been induced to enter into this Agreement by, among other
things, the mutual waivers and certifications in this Section 22.

 

23.         Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed to be an original, but all of which together shall be
deemed to be one and the same agreement. A signed copy of this Agreement
delivered by facsimile, e-mail or other means of electronic transmission shall
be deemed to have the same legal effect as delivery of an original signed copy
of this Agreement.

 

 18 

 

 

24.         Further Assurances. Each of the parties to this Agreement shall, and
shall cause their Affiliates to, execute and deliver such additional documents,
instruments, conveyances and assurances and take such further actions as may be
required to carry out the provisions hereof and to give effect to the
transactions contemplated hereby.

 

[Signature page follows.]

 

 19 

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date
first written above.

 

  COMPANY:       CROSSROADS SYSTEMS, INC.         By:     Name: [_____]   Title:
[_____]

 

  INVESTOR:       210/CRDS INVESTMENT, LLC         By: 210 Capital, LLC,     a
Delaware limited liability company,     the sole Member

 

  By:       Robert H. Alpert     Manager         By:       C. Clark Webb    
Manager

 

Signature Page to Registration Rights Agreement

 

 

 

 

Exhibit A

 

Schedule of Investors

210/CRDS Investment, LLC

8214 Westchester Drive, Suite 950

Dallas, Texas 75225

 

 

 

 

EXHIBIT C

 

Form of Indemnification Agreement

 

 

 

 

Indemnity Agreement

 

This Indemnity Agreement (this “Agreement”) is made and entered into as of this
[___] day of [______], 2017 between Crossroads Systems, Inc., a Delaware
corporation (the “Corporation”), and [______] (“Indemnitee”).

 

INTRODUCTION:

 

A.           Indemnitee is an executive officer, director and/or agent of the
Corporation (or a subsidiary of the Corporation), as the case may be from time
to time, and performs a valuable service for the Corporation in such capacity
(or capacities); and

 

B.           The Certificate of Incorporation (the “Certificate”) and the Bylaws
(the “Bylaws”) of the Corporation contain provisions providing for the
indemnification of the officers, directors and agents of the Corporation to the
maximum extent authorized by Section 145 of the Delaware General Corporation
Law, as amended (“DGCL”); and

 

C.           The Certificate, the Bylaws and the DGCL, by their non-exclusive
nature, permit contracts between the Corporation and the members of its Board of
Directors and officers with respect to indemnification of such directors and
officers; and

 

D.           In accordance with the authorization as provided by the DGCL, the
Corporation has purchased and presently maintains a policy or policies of
Directors and Officers Liability Insurance (“D & O Insurance”), covering certain
liabilities which may be incurred by its directors and officers in the
performance of their duties as directors or officers of the Corporation; and

 

E.           As a result of developments affecting the terms, scope and
availability of D & O Insurance there exists general uncertainty as to the
extent of protection afforded members of the Board of Directors and executive
officers of the Corporation by such D & O Insurance and by statutory and bylaw
indemnification provisions; and

 

F.           In order to induce Indemnitee to continue to serve as an executive
officer, director or agent of the Corporation, the Corporation has determined
and agreed to enter into this contract with Indemnitee.

 

AGREEMENT:

 

Now, Therefore, in consideration of Indemnitee’s continued service as an
executive officer and a member of the Board of Directors after the date hereof,
the parties hereto agree as follows:

 

1.             Indemnification of Indemnitee. The Corporation hereby agrees to
hold harmless, indemnify and defend Indemnitee and any partnership, corporation,
trust or other entity of which Indemnitee is or was a partner, shareholder,
trustee, director, officer, employee or agent (Indemnitee and each such
partnership, corporation, trust or other entity being hereinafter referred to
collectively as an “Indemnitee”) to the fullest extent authorized or permitted
by the provisions of the DGCL in effect on the date hereof or as such laws may
from time to time hereafter be amended to increase the scope of such permitted
indemnification.

 

 

 

 

2.             Additional Indemnity. Subject only to the exclusions set forth in
Section 3 hereof, the Corporation hereby further agrees to hold harmless and
indemnify Indemnitee:

 

(a)          against any and all expenses (including attorneys’ and legal fees
and expenses), damages, claims, witness fees, judgments, fines, penalties,
excise taxes and amounts paid in settlement (if such settlement is approved in
advance by the Corporation, which approval shall not be unreasonably withheld)
actually and reasonably incurred by Indemnitee, as well as any federal state,
local or foreign taxes imposed on Indemnitee as a result of the actual or deemed
receipt of any payments under this Agreement (collectively, “Losses”), in
connection with investigating, defending, being witness in or participating in
(including on appeal), or preparing to defend, be a witness in or participate
in, any threatened, pending or completed action, suit, administrative dispute
mechanism or other proceeding (each, a “Proceeding”), whether civil, criminal,
administrative or investigative (including an action by or in the right of the
Corporation) to which Indemnitee is, was or at any time becomes a party, or is
threatened to be made a party, by reason of the fact that Indemnitee is, was or
at any time becomes a director, trustee, partner, officer, managing member,
employee, agent or fiduciary of the Corporation or any subsidiary of the
Corporation, or is or was serving or at any time serves at the request of the
Corporation or any subsidiary of the Corporation as a director, trustee,
partner, officer, managing member, employee, agent or fiduciary of another
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise, or by reason of any action or inaction on the part of Indemnitee
while serving in such capacity if Indemnitee acted in good faith and in a manner
Indemnitee reasonably believed to be in or not opposed to the best interests of
the Corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe Indemnitee’s conduct was unlawful;

 

(b)          to the extent that Indemnitee is, by reason of service in any of
the capacities described in the preceding paragraph, a witness or its otherwise
asked to participate in a Proceeding to which Indemnitee is not a party, against
any and all Losses actually and reasonably incurred by or on behalf of
Indemnitee in connection therewith; and

 

(c)          otherwise to the fullest extent as may be provided to Indemnitee by
the Corporation under the non-exclusivity provisions of Article XI of the
Corporation’s Bylaws (as the same, including such article, may be amended,
modified or restated from time to time) and the DGCL.

 

3.             Limitations on Additional Indemnity. No indemnity pursuant to
Section 2 hereof shall be paid by the Corporation:

 

 2 

 

 

(a)          except to the extent the aggregate of Losses to be indemnified
thereunder exceeds the sum of such Losses for which the Indemnitee is
indemnified pursuant to Section 1 hereof or pursuant to any D & O Insurance
purchased and maintained by the Corporation;

 

(b)          in respect to remuneration paid to Indemnitee if it shall be
determined by a final judgment or other final adjudication that such
remuneration was in violation of law;

 

(c)          on account of any suit in which judgment is rendered against
Indemnitee for (i) an accounting of profits made from the purchase or sale by
Indemnitee of securities of the Corporation pursuant to the provisions of
Section 16(b) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”) and amendments thereto or similar provisions of any federal, state or
local statutory law, (ii) any reimbursement of the Corporation by Indemnitee of
any bonus or other incentive-based or equity-based compensation or out of any
profits realized from the sale of securities, in each case as may be required by
the Sarbanes-Oxley Act of 2002, or pursuant to any compensation recovery policy
of the Corporation that may be adopted in compliance with the Dodd-Frank Wall
Street Reform and Consumer Protection Act of 2010;

 

(d)          on account of Indemnitee’s conduct which is finally adjudged to
have been knowingly fraudulent or deliberately dishonest, or to constitute
willful misconduct;

 

(e)          on account of Indemnitee’s conduct which is the subject of a
Proceeding described in Section 8(c)(ii) hereof;

 

(f)          on account of any action, claim or proceeding (other than a
proceeding referred to in Section 11(b) hereof) initiated by the Indemnitee
unless such action, claim or proceeding was authorized in the specific case by
action of the Board of Directors; and

 

(g)          if a final decision by a Court having jurisdiction in the matter
shall determine that such indemnification is not lawful (and, in this respect,
both the Corporation and Indemnitee have been advised that the Securities and
Exchange Commission believes that indemnification for liabilities arising under
the federal securities laws is against public policy and is, therefore,
unenforceable and that claims for indemnification should be submitted to
appropriate courts for adjudication).

 

 3 

 

 

4.             Contribution. If the indemnification provided in Sections 1 and 2
hereof is unavailable by reason of a Court decision described in Section 3(g)
hereof based on grounds other than any of those set forth in paragraphs (b)
through (f) of Section 3 hereof, then in respect of any threatened, pending or
completed Proceeding in which the Corporation is jointly liable with Indemnitee
(or would be if joined in such Proceeding), the Corporation shall contribute to
the amount of Losses actually and reasonably incurred and paid or payable by
Indemnitee in such proportion as is fair and reasonable to reflect (a) the
relative benefits received by the Corporation on the one hand and Indemnitee on
the other hand from the transaction from which such Proceeding arose, and (b)
the relative fault of the Corporation on the one hand and of Indemnitee on the
other in connection with the events which resulted in such Losses, as well as
any other relevant equitable considerations. In connection with any registration
of the Corporation’s securities under any securities laws (including, without
limitation, under the Securities Act of 1933, as amended (the “Securities Act”)
or the Exchange Act), the relative benefits received by the Corporation and
Indemnitee shall be deemed to be in the same respective proportions that the net
proceeds from the relevant registered offering(s) (before deducting expenses)
received by the Corporation and Indemnitee, in each case as set forth in the
applicable prospectus, bear to the aggregate public offering price of the
securities so offered. The relative fault of the Corporation on the one hand and
of Indemnitee on the other shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Corporation or its directors, officers, employees and agents,
other than Indemnitee, or supplied by the Indemnitee and the parties’ relative
intent, knowledge, access to information and opportunity to correct or prevent
the circumstances resulting in such Losses. The Corporation agrees that it would
not be just and equitable if contribution pursuant to this Section 4 were
determined by pro rata allocation or any other method of allocation that does
not take account of the foregoing equitable considerations. In connection with
the registration of the Corporation’s securities, in no event shall Indemnitee
be required to contribute any amount under this Section 4 in excess of the net
proceeds received by Indemnitee from Indemnitee’s sale of securities under such
registration statement. No person found guilty of fraudulent misrepresentation
(within the meaning of Section 12 of the Securities Act) shall be entitled to
contribution from any person who was not found guilty of such fraudulent
misrepresentation.

 

5.             Proceedings By or In Right of the Corporation. Notwithstanding
the foregoing provisions of Sections 1 or 2 above, in the case of any
threatened, pending or completed action or suit by or in the right of the
Corporation to procure a judgment in its favor by reason of the fact that
Indemnitee is or was a a director, trustee, partner, officer, managing member,
employee, agent or fiduciary of the Corporation, or while serving as a director
or officer of the Corporation, is or was serving or has agreed to serve at the
request of the Corporation as a a director, trustee, partner, officer, managing
member, employee, agent or fiduciary of another corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise, no indemnification
shall be made in respect of any claim, issue or matter as to which Indemnitee
shall have been adjudged to be liable to the Corporation unless, and only to the
extent that, the Delaware Court of Chancery or the court in which such action or
suit was brought shall determine upon application that, despite the adjudication
of liability but in view of all the circumstances of the case, Indemnitee is
fairly and reasonably entitled to indemnity for such expenses which the Delaware
Court of Chancery or such other court shall deem proper.

 

6.             Notification and Defense of Claim.

 

(a)          Promptly after receipt by Indemnitee of notice of the commencement
of any Proceeding, Indemnitee shall, if a claim thereof is to be made against
the Corporation hereunder, notify the President and Chief Executive Officer of
the Corporation of the commencement thereof; this notification shall include a
summary description of the nature of the claim and the underlying facts to the
extent reasonably known to Indemnitee. The failure to promptly notify the
Corporation of the commencement of the Proceeding, or Indemnitee’s request for
indemnification, will not relieve the Corporation from any liability that it may
have to Indemnitee hereunder, except to the extent the Corporation is materially
prejudiced in its defense of such Proceeding as a result of such failure.

 

 4 

 

 

(b)          In the event the Corporation shall be obligated to pay the expenses
of Indemnitee with respect to a Proceeding, as provided in this Agreement, the
Corporation, if appropriate, shall be entitled to assume the defense of such
Proceeding, with counsel reasonably acceptable to Indemnitee, upon the delivery
to Indemnitee of written notice of its election to do so. After delivery of such
notice, approval of such counsel by Indemnitee and the retention of such counsel
by the Corporation, the Corporation will not be liable to Indemnitee under this
Agreement for any fees of counsel subsequently incurred by Indemnitee with
respect to the same Proceeding, provided that (1) Indemnitee shall have the
right to employ Indemnitee’s own counsel in such Proceeding at Indemnitee’s
expense and (2) if (i) the employment of counsel by Indemnitee has been
previously authorized in writing by the Corporation, (ii) counsel to the
Corporation or Indemnitee shall have reasonably concluded that there may be a
conflict of interest or position, or reasonably believes that a conflict is
likely to arise, on any significant issue between the Corporation and Indemnitee
in the conduct of any such defense or (iii) the Corporation shall not, in fact,
have employed counsel to assume the defense of such Proceeding, then the fees
and expenses of Indemnitee’s counsel shall be at the expense of the Corporation,
except as otherwise expressly provided by this Agreement. The Corporation shall
not be entitled, without the consent of Indemnitee, to assume the defense of any
claim brought by or in the right of the Corporation or as to which counsel for
the Corporation or Indemnitee shall have reasonably made the conclusion provided
for in clause (ii) above.

 

(c)          Subject to the preceding terms of Section 6(b) and other terms of
this Agreement, the Corporation shall have the right to conduct a defense as it
sees fit in its sole discretion including the right to settle any claim against
Indemnitee subject to the limitations set forth herein. The Corporation will
not, without the prior written consent of Indemnitee, consent to the entry of
any judgment against Indemnitee or enter into any settlement or compromise which
(i) includes an admission of fault of Indemnitee, any non-monetary remedy
imposed on Indemnitee or any Losses for which Indemnitee is not wholly
indemnified hereunder or (ii) with respect to any claim with respect to which
Indemnitee may be or is made a party or a participant or may be or is otherwise
entitled to seek indemnification hereunder, does not include, as an
unconditional term thereof, the full release of Indemnitee from all liability in
respect of such claim, which release will be in form and substance reasonably
satisfactory to Indemnitee. Neither the Corporation nor Indemnitee will
unreasonably withhold its consent to any proposed settlement; provided, however,
Indemnitee may withhold consent to any settlement that does not provide a full
and unconditional release of Indemnitee from all liability in respect of such
claim. The Corporation shall not, on its own behalf, settle any part of any
claim to which Indemnitee is party with respect to other parties (including the
Corporation) if any portion of such settlement is to be funded from insurance
proceeds unless approved by (i) the written consent of Indemnitee or (ii) a
majority of the independent directors of the board; provided, however, that the
right to constrain the Corporation’s use of corporate insurance as described in
this section shall terminate at the time the Corporation concludes (per the
terms of this Agreement) that (x) Indemnitee is not entitled to indemnification
pursuant to this agreement, or (y) such indemnification obligation to Indemnitee
has been fully discharged by the Corporation. The Corporation shall promptly
notify Indemnitee once the Corporation has received an offer or intends to make
an offer to settle any claim, and the Corporation shall provide Indemnitee with
a reasonable period to consider such offer; provided, however, Indemnitee shall
have no less than three (3) business days to consider the offer.

 

 5 

 

 

(d)          The Corporation shall have no obligation to indemnify Indemnitee
under this Agreement for any amounts paid in settlement of any Proceeding
without the Corporation’s prior written consent, which shall not be unreasonably
withheld. The Corporation shall not settle any Proceeding in any manner that
would impose any fine or other obligation on Indemnitee without Indemnitee’s
prior written consent, which shall not be unreasonably withheld.

 

(e)          If, at the time of the receipt by the Corporation of a notice of a
claim pursuant to this Section, the Corporation has liability insurance in
effect which may cover such claim, the Corporation shall give prompt notice of
the commencement of such claim to the insurers in accordance with the procedures
set forth in the respective insurance policies. The Corporation shall thereafter
take all necessary or desirable action to cause such insurers to pay, on behalf
of Indemnitee, all amounts payable as a result of such claim in accordance with
the terms of such policies..

 

7.             Presumptions and Effects of Certain Proceedings.

 

(a)          In making a determination with respect to entitlement to
indemnification under this Agreement, the person or persons or entity making
such determination shall, to the fullest extent not prohibited by applicable
law, presume that Indemnitee is entitled to indemnification under this Agreement
if Indemnitee has submitted a request for indemnification in accordance with
this Agreement and the Corporation shall, to the fullest extent not prohibited
by applicable law, have the burden of proof and burden of persuasion by clear
and convincing evidence to overcome that presumption in connection with the
making by any person, persons or entity of any determination contrary to that
presumption. Neither the failure of the Corporation to have made a determination
prior to the commencement of any action pursuant to this Agreement that
indemnification is proper in the circumstances because Indemnitee has met the
applicable standard of conduct, nor an actual determination by the Corporation
that Indemnitee has not met such applicable standard of conduct, shall be a
defense to the action or create a presumption that Indemnitee has not met the
applicable standard of conduct.

 

(b)          The termination of any claim or of any claim, issue or matter
therein, by judgment, order, settlement or conviction, or upon a plea of nolo
contendere or its equivalent, shall not (except as otherwise expressly provided
in this Agreement) of itself adversely affect the right of Indemnitee to
indemnification or create a presumption that Indemnitee did not act in good
faith and in a manner which Indemnitee reasonably believed to be in or not
opposed to the best interests of the Corporation or, with respect to any
criminal claim, that Indemnitee had reasonable cause to believe that
Indemnitee’s conduct was unlawful.

 

 6 

 

  

(c)          For purposes of any determination of good faith, Indemnitee shall
be deemed to have acted in good faith if Indemnitee’s action is based on the
records or books of account of the Corporation, including financial statements,
or on information supplied to Indemnitee by any of the directors or officers of
the Corporation in the course of their duties, or on the advice of any legal
counsel for the Corporation or on information or records given or reports made
to the Corporation by any independent certified public accountant or by any
appraiser or other expert selected with reasonable care by the Corporation. The
provisions of this Section 4(c) shall not be deemed to be exclusive or to limit
in any way the other circumstances in which Indemnitee may be deemed to have met
the applicable standard of conduct set forth in this Agreement. Whether or not
the foregoing provisions of this Section 4(c) are satisfied, it shall in any
event be presumed that Indemnitee has at all times acted in good faith and in a
manner Indemnitee reasonably believed to be in or not opposed to the best
interests of the Corporation. Anyone seeking to overcome this presumption shall
have the burden of proof and the burden of persuasion by clear and convincing
evidence.

 

(d)          The knowledge and/or actions, or failure to act, of any other
director, officer, trustee, partner, managing member, fiduciary, agent or
employee of the Corporation shall not be imputed to Indemnitee for purposes of
determining the right to indemnification under this Agreement..

 

8.             Advancement and Repayment of Expenses.

 

(a)          In the event that Indemnitee employs his own counsel pursuant to
Section 6(b)(i) through (iii) above, the Corporation shall advance to
Indemnitee, prior to any final disposition of any threatened or pending
Proceeding, whether civil, criminal, administrative or investigative, any and
all reasonable Losses incurred in investigating or defending any such Proceeding
within ten days after receiving a request for such advances, which request shall
include copies of invoices presented to Indemnitee for such Losses (except that
in the case of invoices for legal services, any references to legal work
performed or to expenditures made that would cause Indemnitee to waive any
privilege accorded by applicable law shall not be required to be included);

 

(b)          In connection with any payment, advancement or reimbursement
pursuant to Section 8(a) above, Indemnitee shall execute and deliver to the
Corporation an undertaking (which need not be secured and shall be accepted
without reference to Indemnitee’s ability to repay such expenses) to repay
(without interest) any amounts paid, advanced, or reimbursed by the Corporation
in respect of such expenses relating to, arising out of or resulting from any
indemnifiable claim or Loss hereunder in respect of which it shall have been
determined, following the final disposition of such indemnifiable claim or Loss
hereunder, that Indemnitee is not entitled to indemnification; and

 

 7 

 

 

(c)          Notwithstanding the foregoing, the Corporation shall not be
required to advance such expenses to Indemnitee if Indemnitee (i) commences any
Proceeding as a plaintiff unless such advance is specifically approved by a
majority of the Board of Directors or (ii) is a party to an Proceeding brought
by the Corporation and approved by a majority of the Board which alleges willful
misappropriation of corporate assets by Indemnitee, disclosure of confidential
information in violation of Indemnitee’s fiduciary or contractual obligations to
the Corporation, or any other willful and deliberate breach in bad faith of
Indemnitee’s duty to the Corporation or its shareholders.

 

(d)          This Section 8 shall not apply to any claim for which indemnity is
excluded pursuant to Section 3.

 

9.             Procedure. Any indemnification and advances provided for in
Section 1 and Section 2 shall be made no later than 45 days after receipt of the
written request of Indemnitee, and expense advances provided under Section 8
shall be provided within the period set forth in that Section. If the
Corporation disputes any portion of the requested amounts, the undisputed
portion shall be paid and only the disputed portion shall be withheld pending
the resolution of such dispute. If a claim under this Agreement, under any
statute, or under any provision of the Corporation’s Certificate or Bylaws
providing for indemnification, is not paid in full by the Corporation within 45
days after a written request for payment thereof has first been received by the
Corporation, Indemnitee may, but need not, at any time thereafter bring an
action against the Corporation to recover the unpaid amount of the claim and,
subject to Section 14 of this Agreement, Indemnitee shall also be entitled to be
paid for the expenses (including attorneys’ and legal fees and expenses) of
bringing such action. It shall be a defense to any such action (other than an
action brought to enforce a claim for expenses incurred in connection with any
Proceeding in advance of its final disposition) that Indemnitee has not met the
standards of conduct which make it permissible under applicable law for the
Corporation to indemnify Indemnitee for the amount claimed, but the burden of
proving such defense shall be on the Corporation and Indemnitee shall be
entitled to receive interim payments of expenses pursuant to Subsection 2(a)
unless and until such defense may be finally adjudicated by court order or
judgment from which no further right of appeal exists. It is the parties’
intention that if the Corporation contests Indemnitee’s right to
indemnification, the question of Indemnitee’s right to indemnification shall be
for the court to decide, and neither the failure of the Corporation (including
its Board of Directors, any committee or subgroup of the Board of Directors,
independent legal counsel, or its stockholders) to have made a determination
that indemnification of Indemnitee is proper in the circumstances because
Indemnitee has met the applicable standard of conduct required by applicable
law, nor an actual determination by the Corporation (including its Board of
Directors, any committee or subgroup of the Board of Directors, independent
legal counsel, or its stockholders) that Indemnitee has not met such applicable
standard of conduct, shall create a presumption that Indemnitee has or has not
met the applicable standard of conduct.

 

 8 

 

 

10.           Change of Control; Insolvency.

 

(a)          In the event of a Change in Control or the Corporation’s becoming
insolvent (including being placed into receivership or entering the federal
bankruptcy process or similar event), the Corporation shall maintain in force
any and all insurance policies then maintained by the Corporation in providing
insurance (directors’ and officers’ liability, fiduciary, employment practices
or otherwise) in respect of Indemnitee, for a period of six (6) years following
the Change in Control or insolvency event (a “Tail Policy”); provided, however
that the Corporation shall not be required to pay with respect to a Tail Policy
in respect of any one policy year more than 200% of the last annual premium paid
by the Corporation prior to the date of a Change in Control or insolvency event
in respect of the coverages required to be obtained pursuant hereto, but in such
case shall purchase as much coverage as reasonably practicable for such amount.
Such coverage shall be placed by the incumbent insurance broker with the
incumbent insurance carriers using the policies that were in place at the time
of the Change in Control or insolvency event (unless the incumbent carriers will
not offer such policies, in which case the Tail Policy shall be substantially
comparable in scope and amount as the expiring policies, and the insurance
carriers for the Tail Policy shall have an AM Best rating that is the same or
better than the AM Best ratings of the expiring policies)

 

(b)          For the purposes hereof, a “Change in Control” shall be deemed to
have occurred if, on or after the date of this Agreement, (i) any “person” (as
such term is used in Sections 13(d) and 14(d) of the Exchange Act), other than
(A) a trustee or other fiduciary holding securities under an employee benefit
plan of the Corporation acting in such capacity or a corporation owned directly
or indirectly by the stockholders of the Corporation in substantially the same
proportions as their ownership of stock of the Corporation or (B) 210/CRDS
Investment, LLC, becomes the “beneficial owner” (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities of the Corporation
representing more than thirty percent (30%) of the total voting power
represented by the Corporation’s then outstanding voting securities; (ii) during
any period of two (2) consecutive years (not including any period prior to the
execution of this Agreement), individuals who at the beginning of such period
constitute the Board of Directors of the Corporation and any new director (other
than a director designated by a person who has entered into an agreement with
the Corporation to effect a transaction described in Sections 10(b)(i), (iii) or
(iv) herein) whose election by the Board of Directors or nomination for election
by the Corporation’s stockholders was approved by a vote of at least two-thirds
(2/3) of the directors then still in office who either were directors at the
beginning of the period or whose election or nomination for election was
previously so approved, cease for any reason to constitute a majority thereof;
(iii) the stockholders of the Corporation approve a merger or consolidation of
the Corporation with any other corporation other than a merger or consolidation
which would result in the voting securities of the Corporation outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving
entity) at least eighty percent (80%) of the total voting power represented by
the voting securities of the Corporation or such surviving entity outstanding
immediately after such merger or consolidation; or (iv) the stockholders of the
Corporation approve a plan of complete liquidation of the Corporation or an
agreement for the sale or disposition by the Corporation of (in one transaction
or a series of related transactions) all or substantially all of the
Corporation’s assets.

 

 9 

 

 

11.           Enforcement.

 

(a)          The Corporation expressly confirms and agrees that it has entered
into this Agreement and assumed the obligations imposed on the Corporation
hereby in order to induce Indemnitee to continue as an executive officer,
director or agent of the Corporation, and acknowledges that Indemnitee is
relying upon this Agreement in continuing in such capacity; and

 

(b)          In the event Indemnitee is required to bring any action to enforce
rights or to collect moneys due under this Agreement and is successful in such
action, the Corporation shall reimburse Indemnitee for all Indemnitee’s
reasonable fees and expenses (including attorneys’ and legal fees and expenses)
in bringing and pursuing such action.

 

12.           Subrogation. In the event of payment under this Agreement, the
Corporation shall be subrogated to the extent of such payment to all of the
related rights of recovery of Indemnitee against other persons or entities
(other than Indemnitee’s successors), Indemnitee shall execute all documents
reasonably required and shall do all acts that may be reasonably necessary to
secure such rights and to enable the Corporation effectively to bring suit to
enforce such rights.

 

13.            Non-Exclusivity of Rights. The rights conferred on Indemnitee by
this Agreement shall not be exclusive of any other right which Indemnitee may
have or hereafter acquire under any provision of law, provisions of the
Corporation’s Certificate or Bylaws, agreement, vote of stockholders or
directors, or otherwise, both as to action in his official capacity with or on
behalf of the Corporation and as to action in another capacity while holding
office in or on behalf of the Corporation.

 

14.           Partial Indemnification. If Indemnitee is entitled under any
provision of this Agreement to indemnification by the Corporation for some or a
portion of the Losses actually or reasonably incurred by Indemnitee in the
investigation, defense, appeal or settlement of any civil or criminal
Proceeding, but not, however, for the total amount thereof, the Corporation
shall nevertheless indemnify Indemnitee for the portion of such indemnifiable
claim or expense hereunder.

 

15.           Survival of Rights. The rights conferred on Indemnitee by this
Agreement shall continue after Indemnitee has ceased to be a a director,
trustee, partner, officer, managing member, employee, agent or fiduciary of the
Corporation and shall inure to the benefit of Indemnitee’s heirs, executors and
administrators. All agreements and obligations of the Corporation contained
herein shall continue during the period that the Indemnitee is a director or
officer of the Corporation (or is or was serving at the request of the
Corporation as an agent of another Person) and shall continue thereafter so long
as the Indemnitee shall be subject to any possible indemnifiable claim or
expense hereunder (including any rights of appeal thereto) and any Proceeding
commenced by the Indemnitee to enforce or interpret his or her rights under this
Agreement.

 

16.           Separability. Each of the provisions of this Agreement is a
separate and distinct agreement and independent of the others, so that if any or
all of the provisions hereof shall be held to be invalid or unenforceable for
any reason, such invalidity or unenforceability shall not affect the validity or
enforceability of the other provisions hereof or the obligation of the
Corporation to indemnify the Indemnitee to the full extent provided by the
Certificate, Bylaws or the DGCL.

 

 10 

 

 

17.           Governing Law; Consent to Jurisdiction. This Agreement shall be
interpreted and enforced in accordance with the laws of the State of Delaware.
The Corporation and Indemnitee each hereby irrevocably consent to the
jurisdiction of the courts of the State of Delaware for all purposes in
connection with any Proceeding which arises out of or relates to this Agreement
and agree that any action instituted under this Agreement shall be brought only
in the state courts of the State of Delaware.

 

18.           Binding Effect. This Agreement shall be binding upon and inure to
the benefit of and be enforceable by the parties hereto and their respective
successors, assigns, including any direct or indirect successor by purchase,
merger, consolidation or otherwise to all or substantially all of the business
and/or assets of the Corporation, spouses, heirs, and personal and legal
representatives. The Corporation shall require and cause any successor (whether
direct or indirect by purchase, merger, consolidation or otherwise) to all,
substantially all, or a substantial part, of the business and/or assets of the
Corporation, by written agreement in form and substance satisfactory to
Indemnitee, expressly to assume and agree to perform this Agreement in the same
manner and to the same extent that the Corporation would be required to perform
if no such succession had taken place. This Agreement shall continue in effect
regardless of whether Indemnitee continues to serve as a director, trustee,
partner, officer, managing member, employee, agent or fiduciary or fiduciary (as
applicable) of the Corporation or of any other enterprise at the Corporation’s
request.

 

19.           Amendment and Termination. No amendment, modification, termination
or cancellation of this Agreement shall be effective unless such amendment,
modification, termination or cancellation is in writing and signed by both
parties hereto. No waiver of any of the provisions of this Agreement shall be
deemed to be or shall constitute a waiver of any other provisions hereof
(whether or not similar), nor shall such waiver constitute a continuing waiver.

 

20.           Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall constitute an original.

 

21.           Subsequent Legislation. If the DGCL is amended after adoption of
this Agreement to expand further the indemnification permitted to directors or
officers, then the Corporation shall indemnify Indemnitee to the fullest extent
permitted by the DGCL, as so amended.

 

[Signature Page Follows]

 

 11 

 

 

In Witness Whereof, the parties hereto have executed this Indemnity Agreement on
and as of the day and year first above written.

 

  Crossroads Systems, Inc.       By:     Name: Richard K. Coleman, Jr.   Title:
President and Chief Executive Officer       By:     Name: Jennifer Ray Crane  
Title: Chief Financial Officer       Indemnitee               Print Name:
 [_____]

 

[SIGNATURE PAGE TO INDEMNITY AGREEMENT]

 

 

 

 

EXHIBIT D

 

Form of Charter Amendment

 

 

 

 

STATE OF DELAWARE

CERTIFICATE OF AMENDMENT

TO THE

SIXTH AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION

OF

CROSSROADS SYSTEMS, INC.

 

 

 

Crossroads Systems, Inc., a corporation organized and existing under the laws of
the State of Delaware,

 

DOES HEREBY CERTIFY:

 

FIRST: The name of this corporation is Crossroads Systems, Inc. (the
“Corporation”).

 

SECOND: The Sixth Amended and Restated Certificate of Incorporation of the
Corporation was filed with the Secretary of State of Delaware on October 19,
1999. A Certificate of Amendment to the Sixth Amended and Restated Certificate
of Incorporation of the Corporation was filed with the Secretary of State of the
State of Delaware on April 28, 2006. A Certificate of Amendment to the Sixth
Amended and Restated Certificate of Incorporation of the Corporation was filed
with the Secretary of State of the State of Delaware on August 12, 2011. A
Certificate of Amendment to the Sixth Amended and Restated Certificate of
Incorporation of the Corporation was filed with the Secretary of State of the
State of Delaware on April 27, 2015. A Certificate of Amendment to the Sixth
Amended and Restated Certificate of Incorporation of the Corporation was filed
with the Secretary of State of the State of Delaware on June 17, 2016.

 

THIRD: The Corporation filed a plan of reorganization (the “Plan”) which,
pursuant to chapter 11 of title 11 of the United States Code (the “Bankruptcy
Code”), was confirmed by an order, entered August ___, 2017, of the United
States Bankruptcy Court for the Western District of Texas (the “Confirmation
Order”), a court having jurisdiction of a proceeding under the Bankruptcy Code,
and that such Plan and Confirmation Order provides for the making and filing of
this Certificate of Amendment to the Sixth Amended and Restated Certificate of
Incorporation of the Corporation.

 

FOURTH: Pursuant to the Plan, the Confirmation Order and Section 303 of the
General Corporate Law of the State of Delaware, this Certificate of Amendment to
the Restated Certificate of Incorporation of the Corporation adds an Article XVI
to the certificate of incorporation, as amended, to read in its entirety as
follows:

 

ARTICLE XVI
PROHIBITION PURSUANT TO SECTION 1123(A)(6) OF THE BANKRUPTCY CODE

 

Notwithstanding anything to the contrary in this Certificate of Incorporation,
the Corporation shall not issue nonvoting equity securities to the extent
prohibited by Section 1123(a)(6) of chapter 11 of title 11 of the United States
Code (the “Bankruptcy Code”). The prohibition on the issuance of nonvoting
equity securities is included in this Certificate of Incorporation in compliance
with Section 1123(a)(6) of the Bankruptcy Code; provided, however, that the
foregoing restriction (i) will not have any further force or effect beyond that
required under Section 1123(a)(6), (ii) will have such force and effect only for
so long as Section 1123(a)(6) is in effect and applicable to the Corporation,
and (iii) in all events may be amended or eliminated in accordance with
applicable law from time to time in effect.

 

FIFTH: This Certificate of Amendment to the Sixth Amended and Restated
Certificate of Incorporation of the Corporation was duly adopted in accordance
with the Plan, the Confirmation Order and the provisions of Section 303 of the
General Corporation Law of the State of Delaware.

 

IN WITNESS WHEREOF, the Corporation has caused this Certificate of Amendment to
the Sixth Amended and Restated Certificate of Incorporation of the Corporation
to be executed on this ___ day of August, 2017.

 

    CROSSROADS SYSTEMS, INC.         By: /s/ Jennifer Crane     Name: Jennifer
Crane     Title: Chief Financial Officer