**EXHIBIT 10.6**

 

**Option Agreement for Optionees in Europe, Middle-East and Africa**

**EMEA**

 

THE SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAVE NOT BEEN QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF SUCHSECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION THEREFOR PRIOR TO SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF SECURITIES IS EXEMPT FROM QUALIFICATION BY SECTION 25100, 25102, OR 25105 OF THE CALIFORNIA CORPORATIONS CODE.THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO EXEMPT. 

 

THE SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF.NO SUCH SALE OR DISPOSITION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933 

 

**BAKBONE SOFTWARE INCORPORATED**

**STOCK OPTION AGREEMENT**

 

Bakbone Software Incorporated has granted to the individual (the *“********Optionee********”*) named in the *Notice ofGrant of Stock Option* (the *“********Notice********”*) to which this Stock Option Agreement (the *“********Option Agreement********”*) is attached an option (the*“********Option********”*) to purchase certain shares of Stock upon the terms and conditions set forth in the Notice and this Option Agreement. The Option has been granted pursuant to and shall in all respects besubject to the terms and conditions of the Bakbone Software Incorporated 2003 Stock Option Plan (the *“********Plan********”*), as amended to the Date of Option Grant, the provisions of which are incorporated hereinby reference. By signing the Notice, the Optionee: (a) represents that the Optionee has received copies of, and has read and is familiar with the terms and conditions of, the Notice, the Plan and this Option Agreement, (b) accepts the Option subjectto all of the terms and conditions of the Notice, the Plan and this Option Agreement, and (c) agrees to accept as binding, conclusive and final all decisions or interpretations of the Board upon any questions arising under the Notice, the Plan orthis Option Agreement. 

 
 1.**DEFINITIONSAND CONSTRUCTION**. 
 

1.1 **Definitions**. Unless otherwise defined herein, capitalized termsshall have the meanings assigned to such terms in the Notice or the Plan. 

 

1.2 **Construction**. Captions and titles contained herein are for convenience only and shall not affect the meaning or interpretation of any provision of this Option Agreement. Except when otherwise indicated bythe context, the singular shall include the plural and the plural shall include the singular. Use of the term “or” is not intended to be exclusive, unless the context clearly requires otherwise. 

 

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 2.**TAX CONSEQUENCES.**
 

If the Notice designates the Option as either an “Incentive Stock Option” or a “Nonstatutory Stock Option,” please refer to Exhibit2.2 of this Option Agreement. 

 
 3.**ADMINISTRATION********.**
 

All questions of interpretation concerning this Option Agreement shall be determined by the Company’s Board ofDirectors (the “***Board***”). All determinations by the Board shall be final and binding upon all persons having an interest in the Option. Any executive officer or the corporate secretary of the Company(“***Officer***”) shall have the authority to act on behalf of the Company with respect to any matter, right, obligation, or election which is the responsibility of or which is allocated to the Company herein, provided the Officerhas apparent authority with respect to such matter, right, obligation, or election. 

 
 4.**EXERCISEOFTHE OPTION.**
 

4.1 **Right to Exercise****.** Except as otherwise provided herein,the Option shall be exercisable on and after the Initial Vesting Date and prior to the termination of the Option (as provided in Section 6) in an amount not to exceed the number of Vested Shares less the number of shares previously acquired uponexercise of the Option. In no event shall the Option be exercisable for more shares than the Number of Option Shares. 

 

4.2 **Method of Exercise****.** Exercise of the Option shall be by written notice to the Company which must state the election to exercise theOption, the number of whole shares of Stock for which the Option is being exercised and such other representations and agreements as to the Optionee’s investment intent with respect to such shares as may be required pursuant to the provisionsof this Option Agreement. The written notice must be signed by the Optionee and must be delivered in person, by certified or registered mail, return receipt requested, by confirmed facsimile transmission, or by such other means as the Company maypermit, to the Chief Financial Officer of the Company, or other authorized representative of the Company, prior to the termination of the Option as set forth in Section 6, accompanied by full payment of the aggregate Exercise Price for the number ofshares of Stock being purchased. The Option shall be deemed to be exercised upon receipt by the Company of such written notice and the aggregate Exercise Price. 

 

4.3 **Payment of Exercise Price.**

 

(a) ***Forms of Consideration Authorized.*** Except as otherwise provided below, payment of the aggregate Exercise Price for the number of sharesof Stock for which the Option is being exercised shall be made (i) in cash, by check, or cash equivalent, (ii) by tender to the Company, or attestation to the ownership, of whole shares of Stock owned by the Optionee having a Fair Market Value notless than the aggregate Exercise Price, (iii) by means of a Cashless Exercise, as defined in Section 4.3(b), or (iv) by any combination of the foregoing. 

 

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(b) ***Limitations on Forms of Consideration.***

 

(i) **Tender of Stock.** Notwithstanding the foregoing, the Option maynot be exercised by tender to the Company, or attestation to the ownership, of shares of Stock to the extent such tender or attestation would constitute a violation of the provisions of any law, regulation or agreement restricting the redemption ofthe Company’s stock. The Option may not be exercised by tender to the Company, or attestation to the ownership, of shares of Stock unless such shares either have been owned by the Optionee for more than six (6) months (and not used for anotheroption exercise by attestation during such period) or were not acquired, directly or indirectly, from the Company. 

 

(ii) **Cashless Exercise.** A *“********Cashless Exercise********”* means the delivery of a properly executed noticetogether with irrevocable instructions to a broker in a form acceptable to the Company providing for the assignment to the Company of the proceeds of a sale or loan with respect to some or all of the shares of Stock acquired upon the exercise of theOption pursuant to a program or procedure approved by the Company (including, without limitation, through an exercise complying with the provisions of Regulation T as promulgated from time to time by the Board of Governors of the Federal ReserveSystem). The Company reserves, at any and all times, the right, in the Company’s sole and absolute discretion, to decline to approve or terminate any such program or procedure. 

 

4.4 **Tax Withholding.** At the time the Option is exercised, in whole or in part, or at any time thereafter as requestedby the Company, the Optionee hereby authorizes withholding from payroll and any other amounts payable to the Optionee, and otherwise agrees to make adequate provision for (including by means of a Cashless Exercise to the extent permitted by theCompany), any sums required to satisfy the federal, state, local and foreign tax withholding obligations of the Company, if any, which arise in connection with the Option, including, without limitation, obligations arising upon (i) the exercise, inwhole or in part, of the Option, (ii) the transfer, in whole or in part, of any shares acquired upon exercise of the Option, (iii) the operation of any law or regulation providing for the imputation of interest, or (iv) the lapsing of anyrestriction with respect to any shares acquired upon exercise of the Option. The Option is not exercisable unless the tax withholding obligations of the Company are satisfied. Accordingly, the Company shall have no obligation to deliver shares ofStock until the tax withholding obligations of the Company have been satisfied by the Optionee. 

 

4.5 **Certificate Registration.** Except in the event the Exercise Price is paid by means of a Cashless Exercise, the certificate for the shares as towhich the Option is exercised shall be registered in the name of the Optionee, or, if applicable, in the names of the heirs of the Optionee. 

 

4.6 **Restrictions on Grant of the Option and Issuance of Shares.** The grant of the Option and the issuance of shares of Stock upon exercise of theOption shall be subject to compliance with all applicable requirements of federal, state or foreign law with respect to such securities. The Option may not be exercised if the issuance of shares of Stock upon exercise would constitute a violation ofany applicable federal, state or foreign securities laws or other law or regulations or the requirements of any stock exchange or market system upon which the Stock may then be listed. In addition, the Option may not be exercised unless (i) aregistration 

 

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statement under the Securities Act of 1933, as amended (the “***Securities Act***”) shall at the timeof exercise of the Option be in effect with respect to the shares issuable upon exercise of the Option or (ii) in the opinion of legal counsel to the Company, the shares issuable upon exercise of the Option may be issued in accordance with the termsof an applicable exemption from the registration requirements of the Securities Act. THE OPTIONEE IS CAUTIONED THAT THE OPTION MAY NOT BE EXERCISED UNLESS THE FOREGOING CONDITIONS ARE SATISFIED. ACCORDINGLY, THE OPTIONEE MAY NOT BE ABLE TO EXERCISETHE OPTION WHEN DESIRED EVEN THOUGH THE OPTION IS VESTED. The inability of the Company to obtain from any regulatory body having jurisdiction the authority, if any, deemed by the Company’s legal counsel to be necessary to the lawful issuanceand sale of any shares subject to the Option shall relieve the Company of any liability in respect of the failure to issue or sell such shares as to which such requisite authority shall not have been obtained. As a condition to the exercise of theOption, the Company may require the Optionee to satisfy any qualifications that may be necessary or appropriate, to evidence compliance with any applicable law or regulation and to make any representation or warranty with respect thereto as may berequested by the Company. 

 

4.7 **Fractional Shares.** TheCompany shall not be required to issue fractional shares upon the exercise of the Option. 

 
 5.**NONTRANSFERABILITYOFTHE OPTION.**
 

The Option may be exercised during the lifetime of the Optionee only by theOptionee or the Optionee’s guardian or legal representative and may not be assigned or transferred in any manner except by will or by the laws of descent and distribution. Following the death of the Optionee, the Option, to the extent providedin Section 7, may be exercised by the Optionee’s legal representative or by any person empowered to do so under the deceased Optionee’s will or under the then applicable laws of descent and distribution. 

 
 6.**TERMINATIONOFTHE OPTION.**
 

The Option shall terminate and may no longer be exercised after the first tooccur of (a) the Option Expiration Date, (b) the last date for exercising the Option following termination of the Optionee’s Service as described in Section 7, or (c) a Change in Control to the extent provided in Section 8. 

 
 7.**EFFECTOF TERMINATIONOF SERVICE.**
 

7.1 **Option Exercisability.**

 

(a) ***Disability.*** If the Optionee’s Service terminatesbecause of the Disability of the Optionee, the Option, to the extent unexercised and exercisable on the date on which the Optionee’s Service terminated, may be exercised by the Optionee (or the Optionee’s guardian or legal representative)at any time prior to the expiration of twelve (12) months after the date on which the Optionee’s Service terminated, but in any event no later than the Option Expiration Date. 

 

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(b) ***Death.*** If the Optionee’s Service terminates because of the death of the Optionee,the Option, to the extent unexercised and exercisable on the date on which the Optionee’s Service terminated, may be exercised by the Optionee’s legal representative or other person who acquired the right to exercise the Option by reasonof the Optionee’s death at any time prior to the expiration of twelve (12) months after the date on which the Optionee’s Service terminated, but in any event no later than the Option Expiration Date. The Optionee’s Service shall bedeemed to have terminated on account of death if the Optionee dies within three (3) months after the Optionee’s termination of Service. 

 

(c) ***Other Termination of Service.*** If the Optionee’s Service terminates for any reason, except Disability or death, the Option, to theextent unexercised and exercisable by the Optionee on the date on which the Optionee’s Service terminated, may be exercised by the Optionee at any time prior to the expiration of three (3) months (or such other longer period of time asdetermined by the Board, in its discretion) after the date on which the Optionee’s Service terminated, but in any event no later than the Option Expiration Date. 

 

7.2 **Extension if Exercise Prevented by Law.** Notwithstanding the foregoing, if the exercise of the Option within theapplicable time periods set forth in Section 7.1 is prevented by the provisions of Section 4.6, the Option shall remain exercisable until three (3) months after the date the Optionee is notified by the Company that the Option is exercisable, but inany event no later than the Option Expiration Date. 

 

7.3**Extension if Optionee Subject to Section 16(b).** Notwithstanding the foregoing, if a sale within the applicable time periods set forth in Section 7.1 of shares acquired upon the exercise of the Option would subject the Optionee to suit underSection 16(b) of the Exchange Act, the Option shall remain exercisable until the earliest to occur of (i) the tenth (10th) day following the date on which a sale of such shares by the Optionee would no longer be subject to such suit, (ii) the onehundred and ninetieth (190th) day after the Optionee’s termination of Service, or (iii) the Option Expiration Date. 

 
 8.**CHANGEIN CONTROL.**
 

8.1 **Definitions.**

 

(a) An *“****Ownership Change Event****”* shall be deemed to have occurred if any of the following occurs with respect to theCompany: (i) the direct or indirect sale or exchange in a single or series of related transactions by the shareholders of the Company of more than fifty percent (50%) of the voting stock of the Company; (ii) a merger or consolidation in which theCompany is a party; (iii) the sale, exchange, or transfer of all or substantially all of the assets of the Company; or (iv) a liquidation or dissolution of the Company. 

 

(b) A *“********Change in Control********”* shall mean an Ownership Change Event or aseries of related Ownership Change Events (collectively, a *“********Transaction********”*) wherein the shareholders of the Company immediately before the Transaction do not retain immediately after the Transaction,in substantially the same proportions as their ownership of shares of the Company’s voting stock immediately before the Transaction, direct or indirect beneficial ownership of more than fifty percent (50%) of the total combined voting power ofthe 

 

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outstanding voting securities of the Company or, in the case of a Transaction described in Section 8.1(a)(iii), thecorporation or other business entity to which the assets of the Company were transferred (the *“********Transferee********”*), as the case may be. For purposes of the preceding sentence, indirect beneficialownership shall include, without limitation, an interest resulting from ownership of the voting securities of one or more corporations or other business entities which own the Company or the Transferee, as the case may be, either directly or throughone or more subsidiary corporations or other business entities. The Board shall have the right to determine whether multiple sales or exchanges of the voting securities of the Company or multiple Ownership Change Events are related, and itsdetermination shall be final, binding and conclusive. 

 

8.2**Effect of Change in Control on Option.** In the event of a Change in Control, the surviving, continuing, successor, or purchasing corporation or other business entity or parent thereof, as the case may be (the*“********Acquiring Corporation********”*), may, without the consent of the Optionee, either assume the Company’s rights and obligations under the Option or substitute for the Option a substantially equivalentoption for the Acquiring Corporation’s stock. The Option shall terminate and cease to be outstanding effective as of the date of the Change in Control to the extent that the Option is neither assumed or substituted for by the AcquiringCorporation in connection with the Change in Control nor exercised as of the date of the Change in Control. Notwithstanding the foregoing, shares acquired upon exercise of the Option prior to the Change in Control and any consideration receivedpursuant to the Change in Control with respect to such shares shall continue to be subject to all applicable provisions of this Option Agreement except as otherwise provided herein. Furthermore, notwithstanding the foregoing, if the corporation thestock of which is subject to the Option immediately prior to an Ownership Change Event described in Section 8.1(a)(i) constituting a Change in Control is the surviving or continuing corporation and immediately after such Ownership Change Event lessthan fifty percent (50%) of the total combined voting power of its voting stock is held by another corporation or by other corporations that are members of an affiliated group within the meaning of Section 1504(a) of the Code without regard to theprovisions of Section 1504(b) of the Code, the Option shall not terminate unless the Board otherwise provides in its discretion. 

 
 9.**ADJUSTMENTSFOR CHANGESIN CAPITAL STRUCTURE.**
 

In the event of any stock dividend, stocksplit, reverse stock split, recapitalization, combination, reclassification, or similar change in the capital structure of the Company, appropriate adjustments shall be made in the number, Exercise Price and class of shares of stock subject to theOption. If a majority of the shares which are of the same class as the shares that are subject to the Option are exchanged for, converted into, or otherwise become (whether or not pursuant to an Ownership Change Event) shares of another corporation(the *“**************New Shares**************”*), the Board may unilaterally amend the Option to provide that the Option is exercisable for New Shares. In the event of any such amendment, the Numberof Option Shares and the Exercise Price shall be adjusted in a fair and equitable manner, as determined by the Board, in its discretion. Notwithstanding the foregoing, any fractional share resulting from an adjustment pursuant to this Section 9shall be rounded down to the nearest whole number, and in no event may the Exercise Price be decreased to an amount less than the par value, if any, of the stock subject to the Option. The adjustments determined by the Board pursuant to this Section9 shall be final, binding and conclusive. 

 

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 10.**RIGHTSASA SHAREHOLDER, EMPLOYEEORCONSULTANT**. 
 

The Optionee shall have no rights as a shareholder with respect to any shares covered by the Option until the date of the issuance of a certificate for the shares for which the Option has been exercised (as evidencedby the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company). No adjustment shall be made for dividends, distributions or other rights for which the record date is prior to the date such certificate isissued, except as provided in Section 9. If the Optionee is an Employee, the Optionee understands and acknowledges that, except as otherwise provided in a separate, written employment agreement between a Participating Company and the Optionee, theOptionee’s employment is “at will” and is for no specified term. Nothing in this Option Agreement shall confer upon the Optionee any right to continue in the Service of a Participating Company or interfere in any way with any right ofthe Company to terminate the Optionee’s Service as an Employee or Consultant, as the case may be, at any time. 

 
 11.**STOCK DISTRIBUTIONS SUBJECTTO OPTION AGREEMENT.**
 

If, from time to time, there is any stockdividend, stock split or other change, as described in Section 9, in the character or amount of any of the outstanding stock of the corporation the stock of which is subject to the provisions of this Option Agreement, then in such event any and allnew, substituted or additional securities to which the Optionee is entitled by reason of the Optionee’s ownership of the shares acquired upon exercise of the Option shall be immediately subject to the Right of First Refusal with the same forceand effect as the shares subject to the Right of First Refusal immediately before such event. 

 
 12.**NOTICEOF SALES UPON DISQUALIFYING DISPOSITION.**
 

The Optionee shall dispose of the sharesacquired pursuant to the Option only in accordance with the provisions of this Option Agreement. 

 
 13.**LEGENDS.**
 

The Company may at any time place legends referencing the Right of First Refusal and any applicable federal, state or foreign securities law restrictionson all certificates representing shares of stock subject to the provisions of this Option Agreement. The Optionee shall, at the request of the Company, promptly present to the Company any and all certificates representing shares acquired pursuant tothe Option in the possession of the Optionee in order to carry out the provisions of this Section. Unless otherwise specified by the Company, legends placed on such certificates may include, but shall not be limited to, the following: 

 

13.1 “THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEENREGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT COVERING SUCH SECURITIES, THE SALE IS MADE IN ACCORDANCE WITH RULE144 OR RULE 701 UNDER THE ACT, OR THE COMPANY RECEIVES AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY, STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTSOF SUCH ACT.” 

 

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13.2 “THE SHARES EVIDENCED BY THIS CERTIFICATE WERE ISSUED BY THE CORPORATION TO THE REGISTEREDHOLDER UPON EXERCISE OF AN INCENTIVE STOCK OPTION AS DEFINED IN SECTION 422 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (“ISO*”*). IN ORDER TO OBTAIN THE PREFERENTIAL TAX TREATMENT AFFORDED TO ISOs, THE SHARES SHOULD NOT BETRANSFERRED PRIOR TO THE DISQUALIFYING DISPOSITION DATE OF ____________. (1) SHOULD THE REGISTERED HOLDER ELECT TOTRANSFER ANY OF THE SHARES PRIOR TO THIS DATE AND FOREGO ISO TAX TREATMENT, THE TRANSFER AGENT FOR THE SHARES SHALL NOTIFY THE CORPORATION IMMEDIATELY. THE REGISTERED HOLDER SHALL HOLD ALL SHARES PURCHASED UNDER THE INCENTIVE STOCK OPTION IN THEREGISTERED HOLDER’S NAME (AND NOT IN THE NAME OF ANY NOMINEE) PRIOR TO THIS DATE OR UNTIL TRANSFERRED AS DESCRIBED ABOVE.”

 
 14.**LOCK-UP AGREEMENT.**
 

The Optionee hereby agrees that in the event of any underwritten public offering of stock, including an initial publicoffering of stock, made by the Company pursuant to an effective registration statement filed under the Securities Act, the Optionee shall not offer, sell, contract to sell, pledge, hypothecate, grant any option to purchase or make any short sale of,or otherwise dispose of any shares of stock of the Company or any rights to acquire stock of the Company for such period of time from and after the effective date of such registration statement as may be established by the underwriter for suchpublic offering; provided, however, that such period of time shall not exceed one hundred eighty (180) days from the effective date of the registration statement to be filed in connection with such public offering. The foregoing limitation shall notapply to shares registered in the public offering under the Securities Act. 

 
 15.**RESTRICTIONSON TRANSFEROF SHARES.**
 

No shares acquired upon exercise of the Option may be sold, exchanged,transferred (including, without limitation, any transfer to a nominee or agent of the Optionee), assigned, pledged, hypothecated or otherwise disposed of, including by operation of law, in any manner which violates any of the provisions of thisOption Agreement and any such attempted disposition shall be void. The Company shall not be required (a) to transfer on its books any shares which will have been transferred in violation of any of the provisions set forth in this Option Agreement or(b) to treat as owner of such shares or to accord the right to vote as such owner or to pay dividends to any transferee to whom such shares will have been so transferred. 

 
 **16.****MISCELLANEOUS PROVISIONS.**
 

16.1 **Binding Effect.** Subject to the restrictions on transfer set forth herein, this Option Agreement shall inure tothe benefit of and be binding upon the parties hereto and their respective heirs, executors, administrators, successors and assigns. 

 
(1)Disqualifying Disposition Date is specific to each Notice of Exercise. This date will be determined when Share Certificates are issued. 
 

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16.2 **Termination or Amendment.** The Board may terminate or amend the Plan or the Option at anytime; provided, however, that except as provided in Section 8.2 in connection with a Change in Control, no such termination or amendment may adversely affect the Option or any unexercised portion hereof without the consent of the Optionee unlesssuch termination or amendment is necessary to comply with any applicable law or government regulation or is required to enable the Option, if designated an Incentive Stock Option in the Notice, to qualify as an Incentive Stock Option. No amendmentor addition to this Option Agreement shall be effective unless in writing. 

 

16.3 **Notices.** Any notice required or permitted hereunder shall be given in writing and shall be deemed effectively given (except to the extent that this Option Agreement provides for effectiveness only uponactual receipt of such notice) upon personal delivery or upon deposit in the United States Post Office, by registered or certified mail, with postage and fees prepaid, addressed to the other party at the address shown below that party’ssignature or at such other address as such party may designate in writing from time to time to the other party. 

 

16.4 **Integrated Agreement.** The Notice, this Option Agreement and the Plan constitute the entire understanding and agreement of the Optionee and theCompany with respect to the subject matter contained herein or therein and supersedes any prior agreements, understandings, restrictions, representations, or warranties among the Optionee and the Company with respect to such subject matter otherthan those as set forth or provided for herein or therein. To the extent contemplated herein or therein, the provisions of the Notice and the Option Agreement shall survive any exercise of the Option and shall remain in full force and effect.

 

16.5 **Applicable Law.** This Option Agreement shall begoverned by the laws of the State of California as such laws are applied to agreements between California residents entered into and to be performed entirely within the State of California. 

 

16.6 **Counterparts.** The Notice may be executed in counterparts, each ofwhich shall be deemed an original, but all of which together shall constitute one and the same instrument. 

 

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**EXHIBIT 2.2**

 

**Tax Consequences for Incentive and Nonstatutory Stock Options**

 

In the event that the Optionee receiving options hereunder is a resident of the UnitedKingdom, such Optionee shall be liable, at the time of exercise, for all taxes due under the United Kingdom tax regime, including, without limitation, all United Kingdom National Insurance tax. The Company shall not be liable for any such taxes dueat the time of exercise, or at any other time. 

 

If an Option is exercised andthe Optionee is liable to United Kingdom tax, duties or other amounts on such exercise and his employer or former employer being the Company or a subsidiary of the Company is liable to make a payment to the appropriate United Kingdom authorities onaccount of that liability the Optionee shall grant to the Company the irrevocable authority, as agent of the Optionee and on the Optionee’s behalf, to sell or procure the sale of sufficient of the Optioned Shared so that the new proceedspayable to the employer or former employer are so far as possible equal to but not less than the amount payable to the appropriate authorities and the Company shall account to the Optionee for any balance. No Optioned Shares shall be allotted to theOptionee until the employer or former employer has received payment. 

 

If anOption is exercised and the Optionee is required to either bear the cost of all or part of the United Kingdom secondary National Insurance Contributions or to enter into an election in the Stock Option Exercise Notice to the Social SecurityContribution and Benefits Act 1992 then the Optionee shall grant to the Company the irrevocable authority, as agent of the Optionee and on the Optionee’s behalf, to sell or procure the sale of sufficient of the Optioned Shares so that the netproceeds payable to the employer or former employer are so far as possible equal to but not less than the amount of the secondary National Insurance Contributions which the Optionee is liable for and the Company shall account to the Optionee for anybalance. No shares shall be allotted to the Optionee until the employer or former employer has received payment. 

 

The above provisions shall not apply if the Optionee makes alternative arrangements to the satisfaction of his employer or former employer and the Company is informed bythe employer or former employer that the arrangements are satisfactory/the Optionee pays to the Company, as applicable, in Pounds Sterling (whether by cheque or by banker’s draft) the amount necessary to satisfy the total of the amount payableto the appropriate authorities and the secondary National Insurance Contributions. 

TM Incentive Stock Option
  Optionee:                                                                      
TM Nonstatutory Stock Option
  Date:                                                                              
 

**STOCK OPTIONEXERCISE NOTICE**

 

Bakbone Software Incorporated

Attention: Chief Financial Officer

 

_________________________

 

_________________________

 

Ladies andGentlemen:

 

1.**Option.** I was granted an option (the *“********Option********”*) to purchase shares of the common stock (the *“********Shares********”*) of Bakbone SoftwareIncorporated (the *“********Company********”*) pursuant to the Company’s 2003 Stock Option Plan (the *“********Plan********”*), my Notice of Grant of Stock Option (the*“********Notice********”*) and my Stock Option Agreement (the *“********Option Agreement********”*) as follows: 

 

Grant Number:
 
 _________________

Date of Option Grant:
 
_________________

Number of Option Shares:
 
_________________

Exercise Price per Share:
 $________________
 

2. **Exercise ofOption.** I hereby elect to exercise the Option to purchase the following number of Shares, all of which are Vested Shares in accordance with the Notice and the Option Agreement: 

 

Total Shares Purchased:
 _________________
Total Exercise Price (Total Shares X Price per Share)
 $________________
 

3.**Payments.** I enclose payment in full of the total exercise price for the Shares in the following form(s), as authorized by my Option Agreement: 

 

TM Cash:
 $________________
TM Check:
 $________________
TM Tender of Company Stock:
 
Contact Plan Administrator

 

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4. **Tax Withholding.** I authorize payroll withholding and otherwise will make adequateprovision for the federal, state, local and foreign tax withholding obligations of the Company, if any, in connection with the Option. If I am exercising a Nonstatutory Stock Option, I enclose payment in full of my withholding taxes, if any, asfollows: 

 

**(Contact Plan Administrator for amount of tax due.)**

 

TM Cash:
 $________________
TM Check:
 $________________
 

5. **OptioneeInformation.**

 

My address is:                                                                                                                            

                            _____________________________________________________
My Social Security Number is:__________________________________________ 
 

6. **Notice ofDisqualifying Disposition.** If the Option is an Incentive Stock Option, I agree that I will promptly notify the Chief Financial Officer of the Company if I transfer any of the Shares within one (1) year from the date I exercise all or part ofthe Option or within two (2) years of the Date of Option Grant. 

 

7. **Binding Effect.** I agree that the Shares are being acquired in accordance with and subject to the terms, provisions and conditions of the Option Agreement, including the Right of First Refusal set forth therein, to all ofwhich I hereby expressly assent. This Agreement shall inure to the benefit of and be binding upon my heirs, executors, administrators, successors and assigns. 

 

8. **Transfer.** I understand and acknowledge that the Shares have not been registered under the Securities Act of 1933, as amended (the“***Securities Act***”), and that consequently the Shares must be held indefinitely unless they are subsequently registered under the Securities Act, an exemption from such registration is available, or they are sold in accordancewith Rule 144 or Rule 701 under the Securities Act. I further understand and acknowledge that the Company is under no obligation to register the Shares. I understand that the certificate or certificates evidencing the Shares will be imprinted withlegends which prohibit the transfer of the Shares unless they are registered or such registration is not required in the opinion of legal counsel satisfactory to the Company. 

 

I am aware that Rule 144 under the Securities Act, which permits limited public resale of securities acquired in a nonpublicoffering, is not currently available with respect to the Shares and, in any event, is available only if certain conditions are satisfied. I understand that any sale of the Shares that might be made in reliance upon Rule 144 may only be made inlimited amounts in accordance with the terms and conditions of such rule and that a copy of Rule 144 will be delivered to me upon request. 

 

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I understand that I am purchasing the Shares pursuant to the terms of the Plan, the Notice and my OptionAgreement, copies of which I have received and carefully read and understand. 

 

Very truly yours,

(Signature)

 

Receipt of the above is hereby acknowledged.

Bakbone Software Incorporated

By:
 
 

Title:
 
 

Dated:
 
 

 

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**Option Agreement for Optionees in Pacific Rim and North America**

THE SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAVE NOT BEEN QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OFTHE STATE OF CALIFORNIA AND THE ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION THEREFOR PRIOR TO SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF SECURITIES IS EXEMPT FROM QUALIFICATION BY SECTION 25100,25102, OR 25105 OF THE CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO EXEMPT. 

 

THE SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAVE BEEN ACQUIRED FOR INVESTMENT ANDNOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISPOSITION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCHREGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933 

 

**BAKBONE SOFTWARE INCORPORATED**

**STOCK OPTION AGREEMENT**

 

Bakbone Software Incorporated has granted to the individual (the*“********Optionee********”*) named in the *Notice of Grant of Stock Option* (the *“********Notice********”*) to which this Stock Option Agreement (the*“********Option Agreement********”*) is attached an option (the *“********Option********”*) to purchase certain shares of Stock upon the terms and conditions set forth in theNotice and this Option Agreement. The Option has been granted pursuant to and shall in all respects be subject to the terms and conditions of the Bakbone Software Incorporated 2003 Stock Option Plan (the*“********Plan********”*), as amended to the Date of Option Grant, the provisions of which are incorporated herein by reference. By signing the Notice, the Optionee: (a) represents that the Optionee has receivedcopies of, and has read and is familiar with the terms and conditions of, the Notice, the Plan and this Option Agreement, (b) accepts the Option subject to all of the terms and conditions of the Notice, the Plan and this Option Agreement, and (c)agrees to accept as binding, conclusive and final all decisions or interpretations of the Board upon any questions arising under the Notice, the Plan or this Option Agreement. 

 
 1.**DEFINITIONSAND CONSTRUCTION.**
 

1.1 **Definitions.** Unless otherwise defined herein, capitalized terms shall have the meanings assigned to such terms inthe Notice or the Plan. 

 

1.2 **Construction.** Captions andtitles contained herein are for convenience only and shall not affect the meaning or interpretation of any provision of this Option Agreement. Except when otherwise indicated by the context, the singular shall include the plural and the plural shallinclude the singular. Use of the term “or” is not intended to be exclusive, unless the context clearly requires otherwise. 

 

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 2.**TAX CONSEQUENCES.**
 

If the Notice designates the Option as either an “Incentive Stock Option” or a “Nonstatutory Stock Option,” please refer to Exhibit2.1 of this Option Agreement. 

 
 3.**ADMINISTRATION.**
 

All questions of interpretation concerning this Option Agreement shall be determined by the Company’s Board of Directors (the“***Board***”). All determinations by the Board shall be final and binding upon all persons having an interest in the Option. Any executive officer or the corporate secretary of the Company (“***Officer***”) shallhave the authority to act on behalf of the Company with respect to any matter, right, obligation, or election which is the responsibility of or which is allocated to the Company herein, provided the Officer has apparent authority with respect tosuch matter, right, obligation, or election. 

 
 4.**EXERCISEOFTHE OPTION.**
 

4.1 **Right to Exercise.** Except as otherwise provided herein, theOption shall be exercisable on and after the Initial Vesting Date and prior to the termination of the Option (as provided in Section 6) in an amount not to exceed the number of Vested Shares less the number of shares previously acquired uponexercise of the Option. In no event shall the Option be exercisable for more shares than the Number of Option Shares. 

 

4.2 **Method of Exercise.** Exercise of the Option shall be by written notice to the Company which must state the election to exercise the Option, thenumber of whole shares of Stock for which the Option is being exercised and such other representations and agreements as to the Optionee’s investment intent with respect to such shares as may be required pursuant to the provisions of thisOption Agreement. The written notice must be signed by the Optionee and must be delivered in person, by certified or registered mail, return receipt requested, by confirmed facsimile transmission, or by such other means as the Company may permit, tothe Chief Financial Officer of the Company, or other authorized representative of the Company, prior to the termination of the Option as set forth in Section 6, accompanied by full payment of the aggregate Exercise Price for the number of shares ofStock being purchased. The Option shall be deemed to be exercised upon receipt by the Company of such written notice and the aggregate Exercise Price. 

 

4.3 **Payment of Exercise Price.**

 

(a) ***Forms of Consideration Authorized.*** Except as otherwise provided below, payment of the aggregate Exercise Price for the number of sharesof Stock for which the Option is being exercised shall be made (i) in cash, by check, or cash equivalent, (ii) by tender to the Company, or attestation to the ownership, of whole shares of Stock owned by the Optionee having a Fair Market Value notless than the aggregate Exercise Price, (iii) by means of a Cashless Exercise, as defined in Section 4.3(b), or (iv) by any combination of the foregoing. 

 

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(b) ***Limitations on Forms of Consideration.***

 

(i) **Tender of Stock.** Notwithstanding the foregoing, the Option maynot be exercised by tender to the Company, or attestation to the ownership, of shares of Stock to the extent such tender or attestation would constitute a violation of the provisions of any law, regulation or agreement restricting the redemption ofthe Company’s stock. The Option may not be exercised by tender to the Company, or attestation to the ownership, of shares of Stock unless such shares either have been owned by the Optionee for more than six (6) months (and not used for anotheroption exercise by attestation during such period) or were not acquired, directly or indirectly, from the Company. 

 

(ii) **Cashless Exercise.** A *“********Cashless Exercise********”* means the delivery of a properly executed noticetogether with irrevocable instructions to a broker in a form acceptable to the Company providing for the assignment to the Company of the proceeds of a sale or loan with respect to some or all of the shares of Stock acquired upon the exercise of theOption pursuant to a program or procedure approved by the Company (including, without limitation, through an exercise complying with the provisions of Regulation T as promulgated from time to time by the Board of Governors of the Federal ReserveSystem). The Company reserves, at any and all times, the right, in the Company’s sole and absolute discretion, to decline to approve or terminate any such program or procedure. 

 

4.4 **Tax Withholding.** At the time the Option is exercised, in whole or in part, or at any time thereafter as requestedby the Company, the Optionee hereby authorizes withholding from payroll and any other amounts payable to the Optionee, and otherwise agrees to make adequate provision for (including by means of a Cashless Exercise to the extent permitted by theCompany), any sums required to satisfy the federal, state, local and foreign tax withholding obligations of the Company, if any, which arise in connection with the Option, including, without limitation, obligations arising upon (i) the exercise, inwhole or in part, of the Option, (ii) the transfer, in whole or in part, of any shares acquired upon exercise of the Option, (iii) the operation of any law or regulation providing for the imputation of interest, or (iv) the lapsing of anyrestriction with respect to any shares acquired upon exercise of the Option. The Option is not exercisable unless the tax withholding obligations of the Company are satisfied. Accordingly, the Company shall have no obligation to deliver shares ofStock until the tax withholding obligations of the Company have been satisfied by the Optionee. 

 

4.5 **Certificate Registration.** Except in the event the Exercise Price is paid by means of a Cashless Exercise, the certificate for the shares as towhich the Option is exercised shall be registered in the name of the Optionee, or, if applicable, in the names of the heirs of the Optionee. 

 

4.6 **Restrictions on Grant of the Option and Issuance of Shares.** The grant of the Option and the issuance of shares of Stock upon exercise of theOption shall be subject to compliance with all applicable requirements of federal, state or foreign law with respect to such securities. The Option may not be exercised if the issuance of shares of Stock upon exercise would constitute a violation ofany applicable federal, state or foreign securities laws or other law or regulations or the requirements of any stock exchange or market system upon which the Stock may then be listed. In addition, the Option may not be exercised unless (i) aregistration 

 

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statement under the Securities Act of 1933, as amended (the “***Securities Act***”) shall at the timeof exercise of the Option be in effect with respect to the shares issuable upon exercise of the Option or (ii) in the opinion of legal counsel to the Company, the shares issuable upon exercise of the Option may be issued in accordance with the termsof an applicable exemption from the registration requirements of the Securities Act. THE OPTIONEE IS CAUTIONED THAT THE OPTION MAY NOT BE EXERCISED UNLESS THE FOREGOING CONDITIONS ARE SATISFIED. ACCORDINGLY, THE OPTIONEE MAY NOT BE ABLE TO EXERCISETHE OPTION WHEN DESIRED EVEN THOUGH THE OPTION IS VESTED. The inability of the Company to obtain from any regulatory body having jurisdiction the authority, if any, deemed by the Company’s legal counsel to be necessary to the lawful issuanceand sale of any shares subject to the Option shall relieve the Company of any liability in respect of the failure to issue or sell such shares as to which such requisite authority shall not have been obtained. As a condition to the exercise of theOption, the Company may require the Optionee to satisfy any qualifications that may be necessary or appropriate, to evidence compliance with any applicable law or regulation and to make any representation or warranty with respect thereto as may berequested by the Company. 

 

4.7 **Fractional Shares.** TheCompany shall not be required to issue fractional shares upon the exercise of the Option. 

 
 5.**NONTRANSFERABILITYOFTHE OPTION.**
 

The Option may be exercised during the lifetime of the Optionee only by theOptionee or the Optionee’s guardian or legal representative and may not be assigned or transferred in any manner except by will or by the laws of descent and distribution. Following the death of the Optionee, the Option, to the extent providedin Section 7, may be exercised by the Optionee’s legal representative or by any person empowered to do so under the deceased Optionee’s will or under the then applicable laws of descent and distribution. 

 
 6.**TERMINATIONOFTHE OPTION.**
 

The Option shall terminate and may no longer be exercised after the first tooccur of (a) the Option Expiration Date, (b) the last date for exercising the Option following termination of the Optionee’s Service as described in Section 7, or (c) a Change in Control to the extent provided in Section 8. 

 
 7.**EFFECTOF TERMINATIONOF SERVICE.**
 

7.1 **Option Exercisability.**

 

(a) ***Disability.*** If the Optionee’s Service terminatesbecause of the Disability of the Optionee, the Option, to the extent unexercised and exercisable on the date on which the Optionee’s Service terminated, may be exercised by the Optionee (or the Optionee’s guardian or legal representative)at any time prior to the expiration of twelve (12) months after the date on which the Optionee’s Service terminated, but in any event no later than the Option Expiration Date. 

 

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(b) ***Death.*** If the Optionee’s Service terminates because of the death of the Optionee,the Option, to the extent unexercised and exercisable on the date on which the Optionee’s Service terminated, may be exercised by the Optionee’s legal representative or other person who acquired the right to exercise the Option by reasonof the Optionee’s death at any time prior to the expiration of twelve (12) months after the date on which the Optionee’s Service terminated, but in any event no later than the Option Expiration Date. The Optionee’s Service shall bedeemed to have terminated on account of death if the Optionee dies within three (3) months after the Optionee’s termination of Service. 

 

(c) ***Other Termination of Service.*** If the Optionee’s Service terminates for any reason, except Disability or death, the Option, to theextent unexercised and exercisable by the Optionee on the date on which the Optionee’s Service terminated, may be exercised by the Optionee at any time prior to the expiration of three (3) months (or such other longer period of time asdetermined by the Board, in its discretion) after the date on which the Optionee’s Service terminated, but in any event no later than the Option Expiration Date. 

 

7.2 **Extension if Exercise Prevented by Law.** Notwithstanding the foregoing, if the exercise of the Option within theapplicable time periods set forth in Section 7.1 is prevented by the provisions of Section 4.6, the Option shall remain exercisable until three (3) months after the date the Optionee is notified by the Company that the Option is exercisable, but inany event no later than the Option Expiration Date. 

 

7.3**Extension if Optionee Subject to Section 16(b).** Notwithstanding the foregoing, if a sale within the applicable time periods set forth in Section 7.1 of shares acquired upon the exercise of the Option would subject the Optionee to suit underSection 16(b) of the Exchange Act, the Option shall remain exercisable until the earliest to occur of (i) the tenth (10th) day following the date on which a sale of such shares by the Optionee would no longer be subject to such suit, (ii) the onehundred and ninetieth (190th) day after the Optionee’s termination of Service, or (iii) the Option Expiration Date. 

 
 8.**CHANGEIN CONTROL.**
 

8.1 **Definitions.**

 

(a) An *“********Ownership Change Event********”* shall be deemed to have occurred if any of the following occurs withrespect to the Company: (i) the direct or indirect sale or exchange in a single or series of related transactions by the shareholders of the Company of more than fifty percent (50%) of the voting stock of the Company; (ii) a merger or consolidationin which the Company is a party; (iii) the sale, exchange, or transfer of all or substantially all of the assets of the Company; or (iv) a liquidation or dissolution of the Company. 

 

(b) A *“********Change in Control********”* shall mean an Ownership Change Event or aseries of related Ownership Change Events (collectively, a *“********Transaction********”*) wherein the shareholders of the Company immediately before the Transaction do not retain immediately after the Transaction,in substantially the same proportions as their ownership of shares of the Company’s voting stock immediately before the Transaction, direct or indirect beneficial ownership of more than fifty percent (50%) of the total combined voting power ofthe 

 

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outstanding voting securities of the Company or, in the case of a Transaction described in Section 8.1(a)(iii), thecorporation or other business entity to which the assets of the Company were transferred (the “***Transferee***”), as the case may be. For purposes of the preceding sentence, indirect beneficial ownership shall include, withoutlimitation, an interest resulting from ownership of the voting securities of one or more corporations or other business entities which own the Company or the Transferee, as the case may be, either directly or through one or more subsidiarycorporations or other business entities. The Board shall have the right to determine whether multiple sales or exchanges of the voting securities of the Company or multiple Ownership Change Events are related, and its determination shall be final,binding and conclusive. 

 

8.2 **Effect of Change in Control onOption.** In the event of a Change in Control, the surviving, continuing, successor, or purchasing corporation or other business entity or parent thereof, as the case may be (the “***Acquiring Corporation***”), may, without theconsent of the Optionee, either assume the Company’s rights and obligations under the Option or substitute for the Option a substantially equivalent option for the Acquiring Corporation’s stock. The Option shall terminate and cease to beoutstanding effective as of the date of the Change in Control to the extent that the Option is neither assumed or substituted for by the Acquiring Corporation in connection with the Change in Control nor exercised as of the date of the Change inControl. Notwithstanding the foregoing, shares acquired upon exercise of the Option prior to the Change in Control and any consideration received pursuant to the Change in Control with respect to such shares shall continue to be subject to allapplicable provisions of this Option Agreement except as otherwise provided herein. Furthermore, notwithstanding the foregoing, if the corporation the stock of which is subject to the Option immediately prior to an Ownership Change Event describedin Section 8.1(a)(i) constituting a Change in Control is the surviving or continuing corporation and immediately after such Ownership Change Event less than fifty percent (50%) of the total combined voting power of its voting stock is held byanother corporation or by other corporations that are members of an affiliated group within the meaning of Section 1504(a) of the Code without regard to the provisions of Section 1504(b) of the Code, the Option shall not terminate unless the Boardotherwise provides in its discretion. 

 
 9.**ADJUSTMENTSFOR CHANGESIN CAPITAL STRUCTURE.**
 

In the event of any stock dividend, stocksplit, reverse stock split, recapitalization, combination, reclassification, or similar change in the capital structure of the Company, appropriate adjustments shall be made in the number, Exercise Price and class of shares of stock subject to theOption. If a majority of the shares which are of the same class as the shares that are subject to the Option are exchanged for, converted into, or otherwise become (whether or not pursuant to an Ownership Change Event) shares of another corporation(the *“********New Shares********”*), the Board may unilaterally amend the Option to provide that the Option is exercisable for New Shares. In the event of any such amendment, the Number of Option Shares and theExercise Price shall be adjusted in a fair and equitable manner, as determined by the Board, in its discretion. Notwithstanding the foregoing, any fractional share resulting from an adjustment pursuant to this Section 9 shall be rounded down to thenearest whole number, and in no event may the Exercise Price be decreased to an amount less than the par value, if any, of the stock subject to the Option. The adjustments determined by the Board pursuant to this Section 9 shall be final, bindingand conclusive. 

 

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 10.**RIGHTSASA SHAREHOLDER, EMPLOYEEORCONSULTANT.**
 

The Optionee shall have no rights as a shareholder with respect to any shares covered by the Option until the date of the issuance of a certificate for the shares for which the Option has been exercised (as evidenced by the appropriateentry on the books of the Company or of a duly authorized transfer agent of the Company). No adjustment shall be made for dividends, distributions or other rights for which the record date is prior to the date such certificate is issued, except asprovided in Section 9. If the Optionee is an Employee, the Optionee understands and acknowledges that, except as otherwise provided in a separate, written employment agreement between a Participating Company and the Optionee, the Optionee’semployment is “at will” and is for no specified term. Nothing in this Option Agreement shall confer upon the Optionee any right to continue in the Service of a Participating Company or interfere in any way with any right of the Company toterminate the Optionee’s Service as an Employee or Consultant, as the case may be, at any time. 

 
 11.**STOCK DISTRIBUTIONS SUBJECTTO OPTION AGREEMENT.**
 

If, from time to time, there is any stockdividend, stock split or other change, as described in Section 9, in the character or amount of any of the outstanding stock of the corporation the stock of which is subject to the provisions of this Option Agreement, then in such event any and allnew, substituted or additional securities to which the Optionee is entitled by reason of the Optionee’s ownership of the shares acquired upon exercise of the Option shall be immediately subject to the Right of First Refusal with the same forceand effect as the shares subject to the Right of First Refusal immediately before such event. 

 
 12.**NOTICEOF SALES UPON DISQUALIFYING DISPOSITION.**
 

The Optionee shall dispose of the sharesacquired pursuant to the Option only in accordance with the provisions of this Option Agreement. 

 
 13.**LEGENDS.**
 

The Company may at any time place legends referencing the Right of First Refusal and any applicable federal, state or foreign securities law restrictionson all certificates representing shares of stock subject to the provisions of this Option Agreement. The Optionee shall, at the request of the Company, promptly present to the Company any and all certificates representing shares acquired pursuant tothe Option in the possession of the Optionee in order to carry out the provisions of this Section. Unless otherwise specified by the Company, legends placed on such certificates may include, but shall not be limited to, the following: 

 

13.1 “THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEENREGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT COVERING SUCH SECURITIES, THE SALE IS MADE IN ACCORDANCE WITH RULE144 OR RULE 701 UNDER THE ACT, OR THE COMPANY RECEIVES AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY, STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTSOF SUCH ACT.” 

 

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13.2 “THE SHARES EVIDENCED BY THIS CERTIFICATE WERE ISSUED BY THE CORPORATION TO THE REGISTEREDHOLDER UPON EXERCISE OF AN INCENTIVE STOCK OPTION AS DEFINED IN SECTION 422 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (“ISO*”*). IN ORDER TO OBTAIN THE PREFERENTIAL TAX TREATMENT AFFORDED TO ISOs, THE SHARES SHOULD NOT BETRANSFERRED PRIOR TO THE DISQUALIFYING DISPOSITION DATE OF                     . (1) SHOULD THE REGISTERED HOLDER ELECT TO TRANSFER ANY OF THE SHARES PRIOR TO THIS DATE AND FOREGO ISO TAX TREATMENT, THE TRANSFER AGENT FOR THE SHARES SHALLNOTIFY THE CORPORATION IMMEDIATELY. THE REGISTERED HOLDER SHALL HOLD ALL SHARES PURCHASED UNDER THE INCENTIVE STOCK OPTION IN THE REGISTERED HOLDER’S NAME (AND NOT IN THE NAME OF ANY NOMINEE) PRIOR TO THIS DATE OR UNTIL TRANSFERRED AS DESCRIBEDABOVE.” 

 
 14.**LOCK-UP AGREEMENT.**
 

The Optionee hereby agrees that in the event of any underwritten public offering of stock, including an initial publicoffering of stock, made by the Company pursuant to an effective registration statement filed under the Securities Act, the Optionee shall not offer, sell, contract to sell, pledge, hypothecate, grant any option to purchase or make any short sale of,or otherwise dispose of any shares of stock of the Company or any rights to acquire stock of the Company for such period of time from and after the effective date of such registration statement as may be established by the underwriter for suchpublic offering; provided, however, that such period of time shall not exceed one hundred eighty (180) days from the effective date of the registration statement to be filed in connection with such public offering. The foregoing limitation shall notapply to shares registered in the public offering under the Securities Act. 

 
 15.**RESTRICTIONSON TRANSFEROF SHARES.**
 

No shares acquired upon exercise of the Option may be sold, exchanged,transferred (including, without limitation, any transfer to a nominee or agent of the Optionee), assigned, pledged, hypothecated or otherwise disposed of, including by operation of law, in any manner which violates any of the provisions of thisOption Agreement and any such attempted disposition shall be void. The Company shall not be required (a) to transfer on its books any shares which will have been transferred in violation of any of the provisions set forth in this Option Agreement or(b) to treat as owner of such shares or to accord the right to vote as such owner or to pay dividends to any transferee to whom such shares will have been so transferred. 

 
 16.**MISCELLANEOUS PROVISIONS.**
 

16.1 **Binding Effect.** Subject to the restrictions on transfer set forth herein, this Option Agreement shall inure tothe benefit of and be binding upon the parties hereto and their respective heirs, executors, administrators, successors and assigns. 

 
(1)Disqualifying Disposition Date is specific to each Notice of Exercise. This date will be determined when Share Certificates are issued. 
 

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16.2 **Termination or Amendment.** The Board may terminate or amend the Plan or the Option at anytime; provided, however, that except as provided in Section 8.2 in connection with a Change in Control, no such termination or amendment may adversely affect the Option or any unexercised portion hereof without the consent of the Optionee unlesssuch termination or amendment is necessary to comply with any applicable law or government regulation or is required to enable the Option, if designated an Incentive Stock Option in the Notice, to qualify as an Incentive Stock Option. No amendmentor addition to this Option Agreement shall be effective unless in writing. 

 

16.3 **Notices.** Any notice required or permitted hereunder shall be given in writing and shall be deemed effectively given (except to the extent that this Option Agreement provides for effectiveness only uponactual receipt of such notice) upon personal delivery or upon deposit in the United States Post Office, by registered or certified mail, with postage and fees prepaid, addressed to the other party at the address shown below that party’ssignature or at such other address as such party may designate in writing from time to time to the other party. 

 

16.4 **Integrated Agreement.** The Notice, this Option Agreement and the Plan constitute the entire understanding and agreement of the Optionee and theCompany with respect to the subject matter contained herein or therein and supersedes any prior agreements, understandings, restrictions, representations, or warranties among the Optionee and the Company with respect to such subject matter otherthan those as set forth or provided for herein or therein. To the extent contemplated herein or therein, the provisions of the Notice and the Option Agreement shall survive any exercise of the Option and shall remain in full force and effect.

 

16.5 **Applicable Law.** This Option Agreement shall begoverned by the laws of the State of California as such laws are applied to agreements between California residents entered into and to be performed entirely within the State of California. 

 

16.6 **Counterparts.** The Notice may be executed in counterparts, each ofwhich shall be deemed an original, but all of which together shall constitute one and the same instrument. 

 

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**EXHIBIT 2.1**

 

**Tax Consequences for Incentive and Nonstatutory Stock Options**

 

(a) ***Incentive Stock Option.*** If the Notice so designates, thisOption is intended to be an Incentive Stock Option within the meaning of Section 422(b) of the Code, but the Company does not represent or warrant that this Option qualifies as such. The Optionee should consult with the Optionee’s own taxadvisor regarding the tax effects of this Option and the requirements necessary to obtain favorable income tax treatment under Section 422 of the Internal Revenue Code (the “***Code***”), including, but not limited to, holdingperiod requirements. (NOTE TO OPTIONEE: If the Option is exercised more than three (3) months after the date on which you cease to be an Employee (other than by reason of your death or permanent and total disability as defined in Section 22(e)(3) ofthe Code), the Option will be treated as a Nonstatutory Stock Option and not as an Incentive Stock Option to the extent required by Section 422 of the Code.) 

 

(b) ***Nonstatutory Stock Option.*** If the Notice so designates, this Option is intended to be a Nonstatutory Stock Option and shall not betreated as an Incentive Stock Option within the meaning of Section 422(b) of the Code. 

 

(c) ***ISO Fair Market Value Limitation.*** If the Notice designates this Option as an Incentive Stock Option*,* then to the extent that the Option (together with all Incentive Stock Options granted tothe Optionee under all stock option plans of the Company, including the Plan) becomes exercisable for the first time during any calendar year for shares having a Fair Market Value greater than One Hundred Thousand Dollars ($100,000), the portion ofsuch options which exceeds such amount will be treated as Nonstatutory Stock Options. For purposes of this Section 2.2, options designated as Incentive Stock Options are taken into account in the order in which they were granted, and the Fair MarketValue of stock is determined as of the time the option with respect to such stock is granted. If the Code is amended to provide for a different limitation from that set forth in this Section 2.2, such different limitation shall be deemedincorporated herein effective as of the date required or permitted by such amendment to the Code. If the Option is treated as an Incentive Stock Option in part and as a Nonstatutory Stock Option in part by reason of the limitation set forth in thisSection 2.2, the Optionee may designate which portion of such Option the Optionee is exercising. In the absence of such designation, the Optionee shall be deemed to have exercised the Incentive Stock Option portion of the Option first. Separatecertificates representing each such portion shall be issued upon the exercise of the Option. (NOTE TO OPTIONEE: If the aggregate Exercise Price of the Option (that is, the Exercise Price multiplied by the Number of Option Shares) plus the aggregateexercise price of any other Incentive Stock Options you hold (whether granted pursuant to the Plan or any other stock option plan of the Company) is greater than $100,000, you should contact the Chief Financial Officer of the Company to ascertainwhether the entire Option qualifies as an Incentive Stock Option.) 

 

(d) ***Notices of Sales***. If the Notice designates this Option as an Incentive Stock Option*,* the Optionee shall (a) promptly notify the Chief Financial Officer of the Company if the Optionee disposes of any of the sharesacquired pursuant to the Option within 

one (1) year after the date the Optionee exercises all or part of the Option or within two (2) years after the Date ofOption Grant and (b) provide the Company with a description of the circumstances of such disposition. Until such time as the Optionee disposes of such shares in a manner consistent with the provisions of this Option Agreement, unless otherwiseexpressly authorized by the Company, the Optionee shall hold all shares acquired pursuant to the Option in the Optionee’s name (and not in the name of any nominee) for the one-year period immediately after the exercise of the Option and thetwo-year period immediately after Date of Option Grant. At any time during the one-year or two-year periods set forth above, the Company may place a legend on any certificate representing shares acquired pursuant to the Option requesting thetransfer agent for the Company’s stock to notify the Company of any such transfers. The obligation of the Optionee to notify the Company of any such transfer shall continue notwithstanding that a legend has been placed on the certificatepursuant to the preceding sentence. 

TM Incentive Stock Option
  
Optionee:                                                                        

TM Nonstatutory Stock Option
  
Date:                                                                                

 

**STOCK OPTIONEXERCISE NOTICE**

 

Bakbone Software Incorporated

Attention: Chief Financial Officer
__________________________________________________
 

Ladies and Gentlemen: 

 

1. **Option.** I wasgranted an option (the “*******Option*******”) to purchase shares of the common stock (the “*******Shares*******”) of Bakbone Software Incorporated (the “***Company***”) pursuant tothe Company’s 2003 Stock Option Plan (the “***Plan***”), my Notice of Grant of Stock Option (the “***Notice***”) and my Stock Option Agreement (the “***Option Agreement***”) as follows:

 

Grant Number:
 
__________________

Date of Option Grant:
 
__________________

Number of Option Shares:
 
__________________

Exercise Price per Share:
 
$ _________________

 

2. **Exercise ofOption.** I hereby elect to exercise the Option to purchase the following number of Shares, all of which are Vested Shares in accordance with the Notice and the Option Agreement: 

 

Total Shares Purchased:
 
__________________

Total Exercise Price (Total Shares X Price per Share)
 
$ _________________

 

3.**Payments.** I enclose payment in full of the total exercise price for the Shares in the following form(s), as authorized by my Option Agreement: 

 

TM Cash:
 
$ _________________

TM Check:
 
$ _________________

TM Tender of Company Stock:
 
Contact Plan Administrator

 

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4. **Tax Withholding.** I authorize payroll withholding and otherwise will make adequateprovision for the federal, state, local and foreign tax withholding obligations of the Company, if any, in connection with the Option. If I am exercising a Nonstatutory Stock Option, I enclose payment in full of my withholding taxes, if any, asfollows: 

 

**(Contact Plan Administrator for amount of tax due.)**

 

TM Cash:
  
$ _________________

TM Check:
  
$ _________________

 

5. **OptioneeInformation.**

 

My address is:                                                                                                                                                

                            ______________________________________________________________

My Social Security Number is:                                                                                                                    

 

6. **Notice ofDisqualifying Disposition.** If the Option is an Incentive Stock Option, I agree that I will promptly notify the Chief Financial Officer of the Company if I transfer any of the Shares within one (1) year from the date I exercise all or part ofthe Option or within two (2) years of the Date of Option Grant. 

 

7. **Binding Effect.** I agree that the Shares are being acquired in accordance with and subject to the terms, provisions and conditions of the Option Agreement, including the Right of First Refusal set forth therein, to all ofwhich I hereby expressly assent. This Agreement shall inure to the benefit of and be binding upon my heirs, executors, administrators, successors and assigns. 

 

8. **Transfer.** I understand and acknowledge that the Shares have not been registered under the Securities Act of 1933, as amended (the“***Securities Act***”), and that consequently the Shares must be held indefinitely unless they are subsequently registered under the Securities Act, an exemption from such registration is available, or they are sold in accordancewith Rule 144 or Rule 701 under the Securities Act. I further understand and acknowledge that the Company is under no obligation to register the Shares. I understand that the certificate or certificates evidencing the Shares will be imprinted withlegends which prohibit the transfer of the Shares unless they are registered or such registration is not required in the opinion of legal counsel satisfactory to the Company. 

 

I am aware that Rule 144 under the Securities Act, which permits limited public resale of securities acquired in a nonpublicoffering, is not currently available with respect to the Shares and, in any event, is available only if certain conditions are satisfied. I understand that any sale of the Shares that might be made in reliance upon Rule 144 may only be made inlimited amounts in accordance with the terms and conditions of such rule and that a copy of Rule 144 will be delivered to me upon request. 

 

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I understand that I am purchasing the Shares pursuant to the terms of the Plan, the Notice and my OptionAgreement, copies of which I have received and carefully read and understand. 

 

Very truly yours,

 

(Signature)

 

Receipt of the above is hereby acknowledged.

Bakbone Software Incorporated

By:
 
 

Title:
 
 

Dated:
 
 

 

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