Sphere 3D Corporation.: Exhibit 10.5 - Filed by newsfilecorp.com






THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE “ACT”), OR UNDER THE SECURITIES LAWS OF ANY
STATES IN THE UNITED STATES. THIS NOTE IS SUBJECT TO RESTRICTIONS ON
TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS
PERMITTED UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO
REGISTRATION OR EXEMPTION THEREFROM. THE ISSUER OF THIS NOTE MAY REQUIRE AN
OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE
EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND
ANY APPLICABLE STATE SECURITIES LAWS. 

SECURED PROMISSORY NOTE 


	Date of Note: 	 	November 13, 2018 
	 	 	 
	Principal Amount of Note: 	 	$500,000 



For value received, SPHERE 3D
CORP., a corporation organized under the laws of Ontario, Canada (the
“Canadian Borrower”) and HVE Inc., a Delaware
corporation (together with the Canadian Borrower, the “Borrowers”
and each a “Borrower”), jointly and severally, promise to pay to
the undersigned holder or such party’s assigns (the “Holder”) the
principal amount set forth above with interest on the outstanding principal
amount at a rate equal to 8% per annum. Interest shall commence with the date
hereof and shall continue on the outstanding principal amount until paid in
full. Interest shall be computed on the basis of a year of 365 days for the
actual number of days elapsed and shall compound annually. All interest and
principal, unless previously paid in accordance with the terms hereof, shall be
due and payable on the six (6) month anniversary of the date of this Note. 

1.      BASIC
TERMS. 

(a)      Payments.
All payments of interest and principal on this Note shall be in lawful money of
the United States of America and shall be made to the Holder or, if applicable,
to the Holder’s permitted assigns. All payments shall be applied first to
accrued interest, and thereafter to principal. 

(b)      Payment
Dates. Borrowers shall pay the interest accrued on the unpaid principal
amount of this Note in arrears on first day of each calendar month from the date
of this Note until paid in full (whether by acceleration or otherwise). 

(c)      Voluntary
Prepayment. The Borrowers may prepay this Note in whole or in part at
any time without the consent of the Holder, together with all accrued but unpaid
interest and the other amounts due hereunder in respect of the amount prepaid.


(d)      Mandatory
Prepayment. The Borrowers shall immediately prepay this Note in full,
together with all accrued but unpaid interest and other amounts due hereunder,
upon receipt of aggregate proceeds of $5,000,000 or more from equity, debt or
any combination thereof.

(e)     
Late Payments. In addition to interest as set forth herein, the
Borrowers shall pay to Holder a late charge equal to five percent (5%) of any
amounts due under hereunder in the event any such amount is not paid within
three (3) days after the date when due. 




2.      REPRESENTATIONS
AND WARRANTIES. 

(a)      Representations
and Warranties of the Borrowers. Each Borrower hereby represents and
warrants to the Holder as of the date this Note was issued as follows: 

(i)      Organization,
Good Standing and Qualification. Such Borrower is a corporation duly
organized, validly existing and in good standing under the laws of Ontario or
the State of Delaware. Such Borrower has the requisite corporate power to own
and operate its properties and assets and to carry on its business as now
conducted and as proposed to be conducted. Such Borrower is duly qualified and
is authorized to do business and is in good standing as a foreign corporation in
all jurisdictions in which the nature of its activities and of its properties
(both owned and leased) makes such qualification necessary, except for those
jurisdictions in which failure to do so would not have a material adverse effect
on such Borrower or its business (a “Material Adverse Effect”).


(ii)      Corporate
Power. Such Borrower has all requisite corporate power to issue this
Note and to carry out and perform its obligations under this Note. Such
Borrower’s board of directors has approved the issuance of this Note based upon
a reasonable belief that the issuance of this Note is appropriate for such
Borrower after reasonable inquiry concerning such Borrower’s financing
objectives and financial situation. 

(iii)     
Authorization. All corporate action on the part of such Borrower
necessary for the issuance and delivery of this Note has been taken. This Note
constitutes a valid and binding obligation of such Borrower enforceable in
accordance with its terms, subject to laws of general application relating to
bankruptcy, insolvency, the relief of debtors and, with respect to rights to
indemnity, subject to federal and state securities laws. 

(iv)     
Governmental Consents. All consents, approvals, orders or
authorizations of, or registrations, qualifications, designations, declarations
or filings with, any governmental authority required on the part of such
Borrower in connection with issuance of this Note has been obtained.

(v)      Compliance
with Laws. To its knowledge, such Borrower is not in violation of any
applicable statute, rule, regulation, order or restriction of any domestic or
foreign government or any instrumentality or agency thereof in respect of the
conduct of its business or the ownership of its properties, which violation of
which would have a Material Adverse Effect. 

(vi)      Compliance
with Other Instruments. Such Borrower is not in violation or default of
any term of its certificate of incorporation or bylaws, or of any provision of
any mortgage, indenture or contract to which it is a party and by which it is
bound or of any judgment, decree, order or writ, other than such violation(s)
that would not have a Material Adverse Effect. The execution, delivery and
performance of this Note will not result in any such violation or be in conflict
with, or constitute, with or without the passage of time and giving of notice,
either a default under any such provision, instrument, judgment, decree, order
or writ or an event that results in the creation of any lien, charge or
encumbrance upon any assets of such Borrower or the suspension, revocation,
impairment, forfeiture or nonrenewal of any material permit, license,
authorization or approval applicable to such Borrower, its business or
operations or any of its assets or properties.

(vii)      No
“Bad Actor” Disqualification. Such Borrower has exercised reasonable
care to determine whether any Borrower Covered Person (as defined below) is
subject to any of the “bad actor” disqualifications described in Rule
506(d)(1)(i) through (viii), as modified by Rules 506(d)(2) and (d)(3), under
the Act (“Disqualification Events”). To such Borrower’s knowledge,
no Borrower Covered Person is subject to a Disqualification Event. Such Borrower
has complied, to the extent required, with any disclosure obligations under Rule
506(e) under the Act. For purposes of this Note, “Borrower Covered Persons” are those
persons specified in Rule 506(d)(1) under the Act; provided, however, that
Borrower Covered Persons do not include (a) the Holder, or (b) any person or
entity that is deemed to be an affiliated issuer of either Borrower solely as a
result of the relationship between the Borrowers and the Holder.

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(viii)      Offering.
  Assuming the accuracy of the representations and warranties of the Holder
  contained in subsection (b) below, the offer, issue and sale of this Note are
  and will be exempt from the registration and prospectus delivery requirements of
  the Act, and have been registered or qualified (or are exempt from registration
  and qualification) under the registration, permit or qualification requirements
of all applicable state securities laws. 

(ix)      Use
of Proceeds. The Borrower shall use the proceeds of this Note solely
for the operations of its business, and not for any personal, family or
household purpose.

(b)      Representations
and Warranties of the Holder. The Holder hereby represents and warrants
to the Borrower as of the date hereof as follows:

 (i)      Purchase
for Own Account. The Holder is acquiring this Note solely for the
Holder’s own account and beneficial interest for investment and not for sale or
with a view to distribution of this Note or any part thereof, has no present
intention of selling (in connection with a distribution or otherwise), granting
any participation in, or otherwise distributing the same, and does not presently
have reason to anticipate a change in such intention. 

(ii)      Information
and Sophistication. Without lessening or obviating the representations
and warranties of the Borrowers set forth in subsection (a) above, the Holder
hereby: (A) acknowledges that the Holder has received all the information the
Holder has requested from the Borrowers and the Holder considers necessary or
appropriate for deciding whether to acquire this Note, (B) represents that the
Holder has had an opportunity to ask questions and receive answers from the
Borrowers regarding the terms and conditions of the offering of this Note and to
obtain any additional information necessary to verify the accuracy of the
information given the Holder and (C) further represents that the Holder has such
knowledge and experience in financial and business matters that the Holder is
capable of evaluating the merits and risk of this investment. 

(iii)      Ability
to Bear Economic Risk. The Holder acknowledges that investment in this
Note involves a high degree of risk, and represents that the Holder is able,
without materially impairing the Holder’s financial condition, to hold this Note
for an indefinite period of time and to suffer a complete loss of the Holder’s
investment. 

(iv)     
Further Limitations on Disposition. Without in any way limiting the
representations set forth above, the Holder further agrees not to make any
disposition of all or any portion of this Note unless and until:

(1)      there
is then in effect a registration statement under the Act covering such proposed
disposition and such disposition is made in accordance with such registration
statement; or

(2)     
the Holder shall have notified the Borrowers of the proposed
disposition and furnished the Borrowers with a detailed statement of the
circumstances surrounding the proposed disposition, and if reasonably requested
by the Borrowers, the Holder shall have furnished the Borrowers with an opinion
of counsel, reasonably satisfactory to the Borrowers, that such disposition will
not require registration under the Act or any applicable state securities laws;
provided that no such opinion shall be required for dispositions in compliance with
Rule 144 under the Act, except in unusual circumstances. 

3 




Notwithstanding the provisions of paragraphs (1) and (2) above,
  no such registration statement or opinion of counsel shall be necessary for a
  transfer by the Holder to any other entity who, directly or indirectly,
  controls, is controlled by, or is under common control with the Holder, if all
  transferees agree in writing to be subject to the terms hereof to the same
extent as if they were the Holders hereunder. 

(v)      Accredited
Investor Status. The Holder is an “accredited investor” as such term is
defined in Rule 501 under the Act. 

(vi)      No
“Bad Actor” Disqualification. The Holder represents and warrants that
neither (A) the Holder nor (B) any entity that controls the Holder or is under
the control of, or under common control with, the Holder, is subject to any
Disqualification Event, except for Disqualification Events covered by Rule
506(d)(2)(ii) or (iii) or (d)(3) under the Act and disclosed in writing in
reasonable detail to the Borrowers. The Holder represents that the Holder has
exercised reasonable care to determine the accuracy of the representation made
by the Holder in this paragraph, and agrees to notify the Borrowers if the
Holder becomes aware of any fact that makes the representation given by the
Holder hereunder inaccurate. 

(vii)      Foreign
Investors. If the Holder is not a United States person (as defined by
Section 7701(a)(30) of the Internal Revenue Code of 1986, as amended (the
“Code”)), the Holder hereby represents that he, she or it has
satisfied itself as to the full observance of the laws of the Holder’s
jurisdiction in connection with any invitation to subscribe for this Note or any
use of this Note, including (A) the legal requirements within the Holder’s
jurisdiction for the purchase of this Note, (B) any foreign exchange
restrictions applicable to such purchase, (C) any governmental or other consents
that may need to be obtained, and (D) the income tax and other tax consequences,
if any, that may be relevant to the purchase, holding, redemption, sale or
transfer of this Note. The Holder’s subscription, payment for and continued
beneficial ownership of this Note will not violate any applicable securities or
other laws of the Holder’s jurisdiction. 

(viii)      Forward-Looking
Statements. With respect to any forecasts, projections of results and
other forward-looking statements and information provided to the Holder, the
Holder acknowledges that such statements were prepared based upon assumptions
deemed reasonable by the Borrowers at the time of preparation. There is no
assurance that such statements will prove accurate, and the Borrowers have no
obligation to update such statements. 

3.      EVENTS
OF DEFAULT. 

If there shall be any Event of
Default (as defined below) hereunder, at the option and upon the declaration of
the Holder and upon written notice to each Borrower (which election and notice
shall not be required in the case of an Event of Default under subsection (ii)
or (iii) below), this Note shall accelerate and all principal and unpaid accrued
interest shall become immediately due and payable and the interest rate shall
increase to 13% per annum. The occurrence of any one or more of the following
shall constitute an “Event of Default”:

 (i)      the
Borrowers fail to pay timely any of the principal amount due under this Note on
the date the same becomes due and payable or any unpaid accrued interest or
other amounts due under this Note on the date the same becomes due and
payable;

 (ii)      either
Borrower files any petition or action for relief under any bankruptcy, reorganization, insolvency or moratorium law or any
other law for the relief of, or relating to, debtors, now or hereafter in
effect, or makes any assignment for the benefit of creditors or takes any
corporate action in furtherance of any of the foregoing;

4 




 (iii)      an
  involuntary petition is filed against either Borrower (unless such petition is
  dismissed or discharged within 60 days under any bankruptcy statute now or
  hereafter in effect, or a custodian, receiver, trustee or assignee for the
  benefit of creditors (or other similar official) is appointed to take
possession, custody or control of any property of the Borrower); or

 (iv)     
the occurrence of a transaction in which any “person” or “group”
(within the meaning of Section 13(d) and 14(d)(2) of the Securities Exchange Act
of 1934) becomes the “beneficial owner” (as defined in Rule 13d-3 under the
Securities Exchange Act of 1934), directly or indirectly, of a sufficient number
of shares of all classes of stock then outstanding of either Borrower ordinarily
entitled to vote in the election of directors, empowering such “person” or
“group” to elect a majority of the board of managers such Borrower, who did not
have such power before such transaction.

4.     
MISCELLANEOUS PROVISIONS. 

(a)      Waivers.
The Borrowers hereby waive demand, notice, presentment, protest and notice of
dishonor. 

(b)      Further
Assurances. The Holder agrees and covenants that at any time and from
time to time the Holder will promptly execute and deliver to the Borrowers such
further instruments and documents and take such further action as the Borrowers
may reasonably require in order to carry out the full intent and purpose of this
Note and to comply with state or federal securities laws or other regulatory
approvals. 

(c)      Transfers
of Notes. This Note may be transferred only upon its surrender to the
Borrowers for registration of transfer, duly endorsed, or accompanied by a duly
executed written instrument of transfer in form reasonably satisfactory to the
Borrowers. Thereupon, this Note shall be reissued to, and registered in the name
of, the transferee, or a new Note for like principal amount and interest shall
be issued to, and registered in the name of, the transferee. Interest and
principal as well as any fees provided herein shall be paid solely to the
registered holder of this Note. Such payment shall constitute full discharge of
the Borrowers’ obligation to pay such interest and principal. Notwithstanding
the foregoing, the Holder may not assign this Note, whether by operation of law
or otherwise, or any rights or duties hereunder without the prior written
consent of the Borrowers’, and any prohibited assignment will be void and of no
force or effect; provided that the Holder may assign its right, title and
interest in this Note to any person that is controlled by, controls or is under
common control with the Holder. 

(d)      Amendment
and Waiver. Any term of this Note may be amended or waived with the
written consent of the Borrowers’ and the Holder. Upon the effectuation of such
waiver or amendment with the consent of the Holder in conformance with this
paragraph, such amendment or waiver shall be effective as to, and binding
against any future holder of this Note. 

(e)      Governing
Law. This Note shall be governed by, and construed in accordance with,
the laws of the State of Delaware. In any action among or between any of the
parties arising out of or relating to this Note, including any action seeking
equitable relief, each of the parties irrevocably and unconditionally consents
and submits to the exclusive jurisdiction and venue of the state and federal
courts located in Delaware. Each party hereby irrevocably waives all right to
trial by jury in any action, proceeding or counterclaim (whether based on
contract, tort or otherwise) arising out of or relating to this Note, the transactions contemplated hereby and thereby or the
actions of such parties in the negotiation, administration, performance and
enforcement hereof and thereof. The Canadian Borrower hereby irrevocably
appoints HVE Inc., a Delaware corporation (the “Process Agent”), with an
office at HVE Inc., 100 Executive Ct., Suite 2, Waxahachie, TX 75165 as its
agent to receive on behalf of the Canadian Borrower and its property service of
copies of the summons and complaints and any other process which may be served
in any such action or proceeding. 

5 




(f)      Binding
  Agreement. The terms and conditions of this Note shall inure to the
  benefit of and be binding upon the respective successors and assigns of the
  parties. Nothing in this Note, expressed or implied, is intended to confer upon
  any third party any rights, remedies, obligations or liabilities under or by
reason of this Note, except as expressly provided in this Note. 

(g)      Counterparts;
Manner of Delivery. This Note may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Counterparts may be
delivered via facsimile, electronic mail (including pdf or any electronic
signature complying with the U.S. federal ESIGN Act of 2000, Uniform Electronic
Transactions Act or other applicable law) or other transmission method and any
counterpart so delivered shall be deemed to have been duly and validly delivered
and be valid and effective for all purposes. 

(h)      Titles
and Subtitles. The titles and subtitles used in this Note are used for
convenience only and are not to be considered in construing or interpreting this
Note. 

(i)      Notices.
All notices required or permitted hereunder shall be in writing and shall be
deemed effectively given: (i) upon personal delivery to the party to be
notified, (ii) when sent by confirmed electronic mail or facsimile if sent
during normal business hours of the recipient, if not, then on the next business
day, (iii) five days after having been sent by registered or certified mail,
return receipt requested, postage prepaid, or (iv) one day after deposit with a
nationally recognized overnight courier (or two days after deposit with a
recognized international overnight courier with respect to international
delivery), specifying next day delivery, with written verification of receipt.
All communications to a party shall be sent to the party’s address set forth on
the signature page hereto or at such other address(es) as such party may
designate by 10 days’ advance written notice to the other party hereto.

(j)     
Expenses. The Borrowers and the Holder shall each bear their respective
expenses and legal fees incurred with respect to the negotiation, execution and
delivery of this Note and the transactions contemplated herein. 

(k)      Delays
or Omissions. It is agreed that no delay or omission to exercise any
right, power or remedy accruing to the Holder, upon any breach or default of
either Borrower under this Note shall impair any such right, power or remedy,
nor shall it be construed to be a waiver of any such breach or default, or any
acquiescence therein, or of or in any similar breach or default thereafter
occurring; nor shall any waiver of any single breach or default be deemed a
waiver of any other breach or default theretofore or thereafter occurring. It is
further agreed that any waiver, permit, consent or approval of any kind or
character by the Holder of any breach or default under this Note, or any waiver
by the Holder of any provisions or conditions of this Note, must be in writing
and shall be effective only to the extent specifically set forth in writing and
that all remedies, either under this Note, or by law or otherwise afforded to
the Holder, shall be cumulative and not alternative. This Note shall be void and
of no force or effect in the event that the Holder fails to remit the full
principal amount to the Borrowers within five calendar days of the date of this
Note. 

(l)      Borrower
Liability. Each Borrower hereby appoints the other as agent for the
other for all purposes hereunder. Each Borrower hereunder shall be jointly and
severally obligated to repay this Note, regardless of which Borrower actually receives
the proceeds of this Note, as if each Borrower hereunder directly received all
of the proceeds of this Note. Each Borrower waives (a) any suretyship defenses
available to it under any applicable law, and (b) any right to require the
Holder to: (i) proceed against any Borrower or any other person; (ii) proceed
against or exhaust any security; or (iii) pursue any other remedy. The Holder
may exercise or not exercise any right or remedy it has against any Borrower or
any security it holds (including the right to foreclose by judicial or
non-judicial sale) without affecting any Borrower’s liability. Notwithstanding
any other provision of this Note or other related document, each Borrower
irrevocably waives all rights that it may have at law or in equity (including,
without limitation, any law subrogating Borrower to the rights of the Holder
under this Note) to seek contribution, indemnification or any other form of
reimbursement from any other Borrower, or any other person now or hereafter
primarily or secondarily liable for any of the obligations hereunder, for any
payment made by a Borrower with respect to the obligations hereunder in
connection with this Note or otherwise and all rights that it might have to
benefit from, or to participate in, any security for the obligations hereunder
as a result of any payment made by a Borrower with respect to the obligations
hereunder in connection with this Note or otherwise. Any agreement providing for
indemnification, reimbursement or any other arrangement prohibited under this
Section shall be null and void. If any payment is made to a Borrower in
contravention of this Section, such Borrower shall hold such payment in trust
for the Holder and such payment shall be promptly delivered to the Holder for
application to the obligations hereunder, whether matured or unmatured. 

6 




(m)      Security
  Interest. The full amount of this Note is secured by the collateral
  identified and described as security therefor in that certain Pledge Agreement
  dated as of even date herewith and executed by the Canadian Borrower in favor of
  the Holder (as the same may from time to time be amended, modified or
  supplemented or restated, the “Pledge Agreement”).
  Additional rights and obligations of the Holder are set forth in the Pledge
Agreement. 

(n)      Entire
Agreement. This Note constitutes the full and entire understanding and
agreement between the parties with regard to the subjects hereof, and no party
shall be liable or bound to any other party in any manner by any
representations, warranties, covenants and agreements except as specifically set
forth herein. 

[Signature pages follow] 

7 




The parties have executed this SECURED
PROMISSORY NOTE as of the date first noted above.



	BORROWERS: 
	 
	SPHERE 3D CORP. 
	 	 
	By: 	/s/ Peter Tassipoulos 
	 	 
	 	Name: 	Peter Tassiopoulos 
	 	Title: 	President 





	E-mail: 	 	 
	 	 	 
	Address: 	 	 





	HVE INC. 
	 
	 	 
	By: 	/s/ Peter Tassipoulos 
	 	 
	 	Name: 	Peter Tassiopoulos 
	 	Title: 	President 





	E-mail: 	 	 
	 	 	 
	Address: 	 	 



    [Signature Page – OSI / Sphere Note] 




The parties have executed this SECURED
PROMISSORY NOTE as of the date first noted above.



	HOLDER: 
	 
	OVERLAND STORAGE, INC. 
	 	 
	By: 	/s/ Eric Kelly 
	 	 
	 	Name: 	Eric
      Kelly 
	 	Title: 	Chief
      Executive Officer 





	E-mail: 	 	 
	 	 	 
	Address: 	 	 
	 	 	 
	 	 	 



[Signature Page – OSI / Sphere Note]