Exhibit 10.4


 





EMPLOYMENT
AGREEMENT


 


This EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into this November 22, 2016, by and among Nexsan Corporation (the “Company”), Robert B. Fernander (“Executive”),
and, solely as to Sections 3, 4, 9(b) and 10, Imation Corporation (“Imation”), effective as of the consummation
(the “Closing”) of the transactions contemplated by that certain Stock Purchase Agreement by and between Imation
and NXSN Acquisition Corp. (“Purchaser”) (the “Stock Purchase Agreement”).


 


RECITALS


 


WHEREAS, Imation has
entered into the Stock Purchase Agreement, pursuant to which Imation will contribute to the Company all of the issued and outstanding
capital stock of Connected Data, Inc. and then sell all of the shares of common stock of the Company to Purchaser;


 


WHEREAS, Executive
has substantial business knowledge and expertise in the conduct of the business of the Company, and the Company desires to retain
the knowledge, expertise and experience of Executive to assist in the operations and management of the Company; and


 


WHEREAS, the Company
desires to employ Executive, and Executive is willing to be employed by the Company as of the Closing, in each case on the terms
and conditions set forth herein, and with both Executive and the Company understanding that this Agreement and the terms and conditions
set forth herein are conditioned on the Closing and the full funding of the Severance Payment (as defined below) into escrow immediately
upon the Closing in accordance with Section 9(b) hereof, and if the Closing does not occur, or if the full funding into escrow
of the Severance Payment immediately upon the Closing does not occur, then this Agreement shall be null and void.


 


NOW, THEREFORE, in
consideration of the premises and mutual covenants contained herein and for other good and valuable consideration, the receipt
of which is mutually acknowledged, the Company and Executive agree as follows:


 


1.          Employment;
Term. The Company hereby agrees to employ Executive, and Executive hereby accepts such employment with the Company,
in each case, on the terms and subject to the conditions hereinafter set forth. Executive’s employment for purposes of this
Agreement shall commence on the Closing. Executive shall be employed by the Company at will for a period of six (6) months from
the Closing (“Term”), subject to the provisions of Sections 8, 9 and 10 below.


 


2.          Position.


 


(a)          During
the Term, Executive shall serve as the Interim Chief Executive Officer of the Company. In such position, Executive shall have such
executive duties and authority as shall be determined from time to time by the Board of Directors (the “Board”).


 


(b)          During
the Term, Executive will devote his full business time and his best efforts to the performance of Executive’s duties hereunder
(except for paid time off provided for hereunder and periods of illness or incapacity) and will not engage in any other business,
profession or occupation for compensation or otherwise which would conflict or interfere with the rendition of such services to
the Company either directly or indirectly, without the prior written consent of the Board. Notwithstanding the foregoing, it shall
not be a breach of this Section 2(b) for the Executive to be concurrently employed as the Interim CEO of Imation.


 






     


     


    




 


3.          Base
Salary. As compensation for services rendered to the Company during the Term, Executive shall receive a base salary
at the aggregate annual rate of $600,000, less applicable taxes and withholdings (hereinafter referred to as the “Base
Salary”). The Base Salary shall be payable in accordance with the Company’s standard payroll schedule and procedures
including applicable withholdings or deductions. The Base Salary will be subject to adjustment pursuant to the Company’s
employee compensation policies in effect from time to time or as otherwise determined by the Board. The Base Salary shall be payable
one-third (1/3, or $200,000) by Imation and two-thirds (2/3, or $400,000) by the Company. The Base Salary shall be paid through
the Company’s payroll, and Imation shall wire its portion to the payroll provider designated by the Company within three
(3) days prior to the date of payment thereof; and the Company and its agents shall hold any such wire transfers made to the Company
or its agents for the benefit of Executive until the net amounts of same are paid to Executive and any lawful deductions from same
are deposited as employment tax deposits with the appropriate depositary institution(s).


 


4.          Change
in Control Payment. Upon the consummation of (a) a sale of all or substantially all of the assets of the Company; (b)
a transfer, merger, consolidation, or sale in which a majority of the outstanding equity immediately prior to the transaction is
held by another person or entity, or group of persons or entities, immediately after the transaction; (c) a refinancing that is
a deemed a “Liquidity Event” by the Board; or (d) the first public offering of the equity securities of the Company
or a successor thereto for cash pursuant to an effective registration statement under the Securities Act of 1933, as amended, registered
on Form S-1 (each, a “Liquidity Event”), in which the amount of the relevant purchase price, investment or transaction
or refinancing proceeds is between $7 million and $37 million, Executive shall be entitled to three percent (3%) of the Total Enterprise
Value (as defined below) with respect to the Liquidity Event (the “CIC Payment”) as long as Executive (i) is
employed by the Company at the time of the Liquidity Event; or (ii) was employed by the Company in the six (6) months preceding
the Liquidity Event; provided, however, with respect to the foregoing clause (ii), in the event of a Liquidity Event arising under
(c) or (d) above, that Executive shall be entitled to receive the CIC Payment to the extent payment thereof occurs prior to March
15 of the calendar year following the year in which the Liquidity Event occurs, and if payment of the CIC Payment would be made
later than such date, Executive shall only be entitled to receive the CIC Payment to the extent payment thereof would not result
in the assessment of taxes and/or penalties on Executive pursuant to Section 409A of the Code. For the avoidance of doubt, a Liquidity
Event shall not include refinancing through a new debt facility or a new equity investment, unless preferred shareholders of the
Company receive liquidation preferences in an event that is deemed a Liquidity Event by the Board. For purposes of this Section
4, “Total Enterprise Value” shall mean the market value of the Company, after taking into account both holders
of debt and equity. The CIC Payment shall be payable fifty percent (50%) by Imation and fifty percent (50%) by the Company. Such
CIC Payment shall be paid through the Company’s payroll, and Imation shall wire its fifty percent (50%) portion to the payroll
provider designated by the Company within three (3) days prior to the date of payment thereof; and the Company and its agents shall
hold any such wire transfers made to the Company or its agents for the benefit of Executive until the net amounts of same are paid
to Executive and any lawful deductions from same are deposited as employment tax deposits with the appropriate depositary institution(s).


 






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5.          Employee
Benefits and Paid Time Off. During the Term, Executive shall be entitled to participate in the Company’s employee
benefit plans as in effect from time to time, on the same basis as those benefits are generally made available to other peer executives
of the Company and in accordance with the terms of those plans as may be in existence from time to time. In addition to those employee
benefits, Executive will be entitled to accrue paid time off (“PTO”) in accordance with the Company’s
PTO policy. The Company hereby reserves the right to alter its policies and/or amend its employee benefits plans and programs at
its sole discretion.


 


6.          Expense
Reimbursement. During the Term, reasonable business expenses (including travel expenses) incurred by Executive in the
performance of Executive’s duties hereunder shall be reimbursed by the Company in accordance with Company policies in effect
from time to time. Executive will be expected to reimburse the Company for any expenses paid by the Company that would not be eligible
for reimbursement if paid by Executive. The Company acknowledges that Executive resides and will primarily perform work in Austin,
Texas, and will regularly be travelling on Company business to and from his home base in Austin, Texas, and all travel expense
related to such business travel will be reimbursable travel expense.


 


7.          Code
Section 409A. A termination of employment shall not be deemed to have occurred for purposes of any provision of
this Agreement providing for the payment of any amounts or benefits upon or following a termination of employment unless such termination
is also a “separation from service” within the meaning of Section 409A of the Code and, for purposes of any such
provision of this Agreement, references to a “termination,” “termination of employment” or like terms shall
mean “separation from service.” Notwithstanding any other provision herein, if Executive is deemed on the date of termination
to be a “Specified Employee,” as that term is defined in Section 409A of the Code, then with regard to any payment
or the provision of any benefit under this Agreement that is considered deferred compensation under Section 409A of the Code
payable on account of a “separation from service” and that is not exempt from Section 409A of the Code as involuntary
separation pay or a short-term deferral (or otherwise), such payment or benefit shall be made or provided at the date which is
the earlier of (i) the expiration of the six (6)-month period measured from the date of such “separation from service”
of Executive, and (ii) the date that is ten (10) days after the date of Executive’s death (the “Delay Period”).
Upon the expiration of the Delay Period, all payments and benefits delayed pursuant to this Section (whether they would have
otherwise been payable in a single sum or in installments in the absence of such delay) shall be paid or reimbursed to Executive
in a lump sum without interest, and any remaining payments and benefits due under this Agreement shall be paid or provided in accordance
with the normal payment dates specified for them herein.


 






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8.          Termination
by the Company for Cause or by Your Resignation. In the event that Executive’s employment is terminated for Cause
during the Term or by Executive’s resignation during the Term, the Company shall have no further financial obligations to
Executive under this Agreement except for payment to Executive of (a) Executive’s accrued, but unpaid wages or other benefits
earned through the date of separation to which Executive is otherwise legally entitled, (b) any accrued but unused paid time off,
(c) any unreimbursed expenses in accordance with the Company’s policies, and (d) any other vested benefits or vested amounts
due and owed to Executive under the terms of any plan, program or arrangement of the Company on the same basis as those benefits
are generally made available to other peer executives of the Company and in accordance with the terms of those plans as may be
in existence from time to time (collectively, “Accrued Rights”). For purposes of this Agreement, “Cause”
shall mean (i) the willful and material failure by Executive to perform Executive’s material duties with respect to the Company
or its affiliates following Executive’s failure to correct such failure within thirty (30) days after Executive’s receipt
of written notice of breach from the Company specifying the particulars of such breach sufficiently to permit its cure; (ii) the
willful or intentional engaging by Executive in conduct within the scope of Executive’s employment that causes material and
demonstrable injury, monetarily or otherwise, to the Company; (iii) Executive’s conviction for, or a plea of nolo contendere
to, the commission of a felony of any type or any crime related to the Company involving dishonesty, misappropriation, breach of
fiduciary duty, or moral turpitude; (iv) Executive obtaining any personal profit not disclosed to and approved by the Board in
connection with any transaction entered into by, or on behalf of, or in relation to, the Company; or (v) a material breach of Executive’s
covenants set forth in this letter agreement or violating any of the terms of the Company’s established rules or policies
which, if curable, is not cured to the Board’s reasonable satisfaction within fifteen (15) days after written notice thereof
to Executive, it being agreed and understood that any such notice of material breach or violation shall specify the particulars
of any such breach or violation sufficiently to permit its cure.


 


9.          Termination
by the Company Without Cause or by Executive for Good Reason. In the event that Executive’s employment is terminated
by the Company without Cause during the Term or by the Executive for Good Reason (as defined below) during the Term, the Company
shall have no further financial obligations to Executive (or, as the case may be, to Executive’s heirs, devisees or estate)
under this Agreement except for payment to Executive of the following as conditioned below:


 


(a)          Executive’s
Accrued Rights; and


 


(b)          Subject
to (i) the obligations and restrictions set forth in subparagraph (c) below, and (ii) Executive’s execution and return of
a severance agreement, which shall, among other things, release the Company (and its officers, directors, employees, agents, parents,
affiliated entities, and successors and assigns of any of them) from any and all claims, and which shall be in a form and containing
reasonable terms in the reasonable discretion of the Board (the “Severance Agreement”), within twenty-one (21)
days following the Company’s presenting Executive with such Severance Agreement; and (iii) Executive’s non-revocation
of and continued compliance with the Severance Agreement, Executive shall be entitled to a severance payment equal to $450,000,
subject to all applicable taxes and withholdings (“Severance Payment”), payable as a lump sum on the Company’s
next normal payroll processing at least five (5) days following the expiration date of any revocation period (if applicable) under
the Severance Agreement. The Severance Payment shall be payable fifty percent (50%) by Imation and fifty percent (50%) by the Company.
Such Severance Payment shall be paid through the Company’s payroll, and Imation shall wire its fifty percent (50%) portion
to the payroll provider designated by the Company within three (3) days prior to the date of payment thereof; and the Company and
its agents shall hold any such wire transfers to the Company or its agents for the benefit of Executive until the net amounts of
same are paid to Executive and any lawful deductions from same are deposited as employment tax deposits with the appropriate depositary
institution(s). Immediately upon Closing, the Company and Imation shall deposit the gross amounts of their respective portions
of the Severance Payment with an escrow agent acceptable to Executive; and the escrow agent’s maintaining and disbursement
of such monies shall be in accordance with and subject to escrow instructions acceptable to Executive. The parties shall work in
good faith to put in place an escrow agreement in connection with the foregoing.


 






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(c)          Continuing
Obligations. Notwithstanding the termination of Executive’s employment, Executive agrees that the Severance Payment is
intended solely to provide a financial cushion while Executive searches for new non-competitive employment and, therefore, Executive’s
entitlement to obtain or keep such monies is expressly conditioned upon and limited by the following:


 


(i)          Non-Disparagement.
Following Executive’s employment with the Company, Executive agrees not to defame, disparage or criticize the Company, its
business plan, procedures, products, services, development, finances, financial condition, capabilities or other aspect of its
business, or any of its officers, directors, agents or assigns (and their direct and indirect shareholders, members and partners,
and directors and officers) in any medium (whether oral, written, electronic or otherwise, whether currently existing or hereafter
created), to any person or entity, without limitation in time. Notwithstanding the foregoing sentence, Executive may confer in
confidence with Executive’s advisors and make truthful statements as required by law or to the Board.


 


(ii)         Non-Solicitation
and Non-Competition. Any right to receiving or keeping any portion of the Severance Payment is expressly conditioned on Executive
refraining from violating any of the restrictive covenants in this Agreement, including, but not limited to Sections 11 (Non-Solicitation)
and 12 (Non-Competition) below. Thus, for purposes of clarification and without limitation, if Executive were to violate the non-competition
provision below in Section 12 by commencing employment with a direct competitor in the data storage industry in a prohibited
geographic area during the Restricted Period, Executive would be required to return any part of the Severance Payment already received
(including any lump sum payment) and any right to receiving additional payments toward the maximum Severance Payment shall cease.


 


(iii)        Proprietary
and Confidential Information. Any right to receiving or keeping any portion of the Severance Payment is further conditioned
on Executive continuing compliance with the Proprietary Information and Inventions Agreement and not otherwise misusing any Company
confidential, proprietary or trade secret information.


 


For purposes of this
Agreement, “Termination by the Company Without Cause” shall include but shall not be limited to the following
circumstances: (a) Executive’s death; or (b) Executive’s Disability, which shall be deemed to have occurred when in
the good faith judgment of the Board, Executive becomes physically or mentally incapacitated and is therefore unable for a period
of four (4) consecutive months or for an aggregate of six (6) months in any twelve (12) consecutive month period to perform Executive’s
duties (such incapacity is referred to herein as “Disability”). The Company will also comply with any applicable
federal and state disability and leave laws.


 






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For purposes of this
Section 9 of the Agreement, Executive shall be entitled to terminate employment for “Good Reason” by written
notice to the Company of such termination within sixty (60) days after any of the following events occur: (a) a material diminution
occurs in the Executive’s title or duties as Interim Chief Executive Officer; (b) the Company requires that the Executive
change his primary residence away from Austin, Texas, without giving Executive at least nine (9) months’ advance notice,
or without a reasonable increase in Executive’s compensation commensurate with the increased cost of living in the new locale
to which the Company has requested the Executive to relocate, or without providing reasonable relocation benefits to make the Executive
whole for all reasonable costs relative to the requirement that he relocate his family residence from Austin, Texas to elsewhere;
or (c) a Change in Control (as defined below) occurs. If any such events occur, then Executive shall be deemed to have been constructively
discharged and Executive shall have the right to terminate his employment for Good Reason and receive the severance benefits described
in this Agreement, provided that Executive notifies the Board of his election to terminate employment for Good Reason within sixty
(60) days following any such event and the Board has not cured such event within ten (10) business days after the Board receives
such notification. Notwithstanding anything herein to the contrary, if Executive’s employment terminates during the Term
due to the Good Reason trigger set forth in the foregoing subsection (c), (i) Imation shall be solely responsible for payment of
the Severance Payment, (ii) such Severance Payment shall be paid through the Company’s payroll, and Imation shall wire the
Severance Payment to the payroll provider designated by the Company within three (3) days prior to the date of payment thereof,
and (iii) the Company and its agents shall hold any such wire transfers to the Company or its agents for the benefit of Executive
until the net amounts of same are paid to Executive and any lawful deductions from same are deposited as employment tax deposits
with the appropriate depositary institution(s).


 





For purposes of this
Section 9 of the Agreement, “Change in Control” means the occurrence of any of the following events that qualifies
as a “change in control event” (within the meaning of Treasury Regulation Section 1.409A-3(i)(5)(i)) with respect to
the Company:


 


		(1)	a majority of the members of the Board is replaced during
any twelve (12) month period by directors whose appointment or election is not endorsed by a majority of the members of the Board
before the date of the appointment or election;



 


		(2)	any one person, or more than one person acting as a group
(as determined under Treasury Regulation Section 1.409A-3(i)(5)(vii)(C)) acquires substantially all of the Company’s assets
(an “Asset Sale”), unless the individuals who comprise the Board immediately prior to such Asset Sale constitute
a majority of the board of directors or other governing body of either the entity that acquired such assets in such Asset Sale
or its parent; or



 



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		(3)	any other transaction is consummated with respect to
the Company that qualifies as a “change in control event” (within the meaning of Treasury Regulation Section 1.409A-3(i)(5)(i)).



 


10.         Termination
Upon Expiration of Term. Executive’s employment under this Agreement shall automatically expire upon the expiration
of the Term. In the event of such termination upon the expiration of the Term, the Company shall have no further financial obligations
to Executive (or, as the case may be, to Executive’s heirs, devisees or estate) under this Agreement except for payment to
Executive of the Accrued Rights and the Severance Payment described in and pursuant to the terms and conditions of Section 9; provided,
that notwithstanding anything herein to the contrary, (i) Imation shall be solely responsible for payment of the Severance Payment
in the event of a termination of Executive’s employment upon expiration of the Term, (ii) such Severance Payment shall be
paid through the Company’s payroll, and Imation shall wire
the Severance Payment to the payroll provider designated by the Company within three (3) days prior to the date of payment thereof,
and (iii) the Company and its agents shall hold any such wire transfers to the Company or its agents for the benefit of Executive
until the net amounts of same are paid to Executive and any lawful deductions from same are deposited as employment tax deposits
with the appropriate depositary institution(s).


 


11.         Non-Solicitation.


 


(a)          During
the Restricted Period (as defined below), Executive shall not, whether on Executive’s own behalf or on behalf of or in conjunction
with any Person, directly or indirectly;


 


(i)          solicit
or encourage any employee of the Company or its affiliates to leave the employment of the Company or its affiliates;


 


(ii)         hire
any such employee who was employed by the Company or its affiliates as of the date of Executive’s termination of employment
with the Company or who left the employment of the Company or its affiliates coincident with, or within one (1) year prior to or
after, the termination of Executive’s employment with the Company;


 


(iii)        solicit
or encourage any person that serves as a contractor or consultant of the Company or its affiliates to discontinue providing services
to the Company or any affiliate of the Company;


 


(iv)        call
on, solicit or service any customer or client of the Company or its affiliates with the intent of selling or attempting to sell
any service or product the same or substantially similar to the services or products sold by the Company or its affiliates; or


 


(v)         in
any way materially interfere with the relationship between the Company or its affiliates and any customer, supplier, licensee or
other business relation (or any prospective customer, supplier, licensee or other business relationship) of the Company or any
of its affiliates (including, without limitation, by making any negative or disparaging statements or communications regarding
the Company, any of its affiliates or any of their operations, officers, directors or investors).


 






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(b)          It
is expressly understood and agreed that although Executive and the Company consider the restrictions contained in this Section to
be reasonable, if a final judicial determination is made by an arbitrator or court of competent jurisdiction that the time or territory
or any other restriction contained in this Agreement is an unenforceable restriction against Executive, the provisions of this
Agreement shall not be rendered void but shall be deemed amended to apply as to such maximum time and territory and to such maximum
extent as such court may judicially determine or indicate to be enforceable. Alternatively, if any court of competent jurisdiction
or arbitrator finds that any restriction contained in this Agreement is unenforceable, and such restriction cannot be amended so
as to make it enforceable, such finding shall not affect the enforceability of any of the other restrictions contained herein.


 


(c)          For
purposes of this Agreement, “Restricted Period” shall mean the period commencing on the Closing and ending twelve
(12) months following the conclusion of Executive’s employment or the cessation of severance payments, whichever is
shorter, whether such employment ends prior to or at the conclusion of the Term.


 


(d)          The
existence of any claim or cause of action by Executive against the Company or any of its affiliates, whether predicated on this
Agreement or otherwise, will not constitute a defense to the enforcement by the Company of the provisions of Sections 11, 12 or
13, which Sections will be enforceable notwithstanding the existence of any breach by the Company. Notwithstanding the foregoing,
Executive will not be prohibited from pursuing such claims or causes of action against the Company. Executive consents to the Company
notifying any future employer of Executive’s obligations under Section 11, 12 and 13 of this Agreement and Company agrees
to provide Executive copies of any such written notices contemporaneously with any such transmittal to others.


 


(e)          In
the event of any breach or violation by Executive of this Section 11, the Restricted Period will be tolled until such breach
or violation has been duly cured.1


 


12.          Non-Competition.


 


(a)          During
the Restricted Period, Executive shall not (without the express written agreement of the Board), whether on Executive’s own
behalf or on behalf of or in conjunction with any other person or entity, directly or indirectly whether as owner, partner, investor,
consultant, agent, executive, co-venturer or otherwise (other than through ownership of publicly-traded capital stock of a corporation
which represents less than two percent (2%) of the outstanding capital stock of such corporation), (i) compete with the Company
or any parent, subsidiary or affiliate hereof in any business activities relating to the data storage industry in any state in
the United States which the Company or any parent, subsidiary or affiliate thereof conducts business or sells products or services
relating to the data storage industry, or (ii) undertake any planning for any business competitive with the Company or any parent,
subsidiary or affiliate thereof relating to the data storage industry in any state in the United States which the Company or any
parent, subsidiary or affiliate thereof conducts such business or sells such products or services.


 





 






1The
non-prevailing party to any action or proceeding to enforce any provision of this Agreement or to obtain damages as a result of
a breach of this Agreement or to enjoin any breach of this Agreement shall reimburse the prevailing party for any and all
reasonable costs and expenses (including attorneys’ fees) incurred by the prevailing party
in connection with such action or proceeding.



 






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(b)          It
is expressly understood and agreed that although Executive and the Company consider the restrictions contained in this Section to
be reasonable, if a final judicial determination is made by an arbitrator or court of competent jurisdiction that the time or territory’
or any other restriction contained in this Agreement is an unenforceable restriction against Executive, the provisions of this
Agreement shall not be rendered void but shall be deemed amended to apply as to such maximum time and territory and to such maximum
extent as such court may judicially determine or indicate to be enforceable. Alternatively, if any court of competent jurisdiction
or arbitrator finds that any restriction contained in this Agreement is unenforceable, and such restriction cannot be amended so
as to make it enforceable, such finding shall not affect the enforceability of any of the other restrictions contained herein or
any other provision of this Agreement.


 


(c)          The
existence of any claim or cause of action by Executive against the Company or any of its affiliates, whether predicated on this
Agreement or otherwise, will not constitute a defense to the enforcement by the Company of the provisions of Sections 11, 12 or
13, which Sections will be enforceable notwithstanding the existence of any breach by the Company. Notwithstanding the foregoing.
Executive will not be prohibited from pursuing such claims or causes of action against the Company. Executive consents to the Company
notifying any future employer of Executive’s obligations under Sections 11, 12, and 13 of this Agreement and Company agrees
to provide Executive copies of any such written notices contemporaneously with any such transmittal to others.


 


(d)          In
the event of a breach or violation by Executive of this Section 12 the Restricted Period will be tolled until such breach
or violation has been duly cured.


 


(e)          The
non-prevailing party to any action or proceeding to enforce any provision of this Agreement or to obtain damages as a result of
a breach of this Agreement or to enjoin any breach of this Agreement shall reimburse the prevailing party for any and all reasonable
costs and expenses (including attorneys’ fees) incurred by the prevailing party in connection with such action or proceeding.


 


13.         Specific
Performance. Executive acknowledges and agrees that the Company’s remedies at law for a breach or threatened breach
of any of the provisions of Sections 11 or 12 would be inadequate and the Company would suffer irreparable damages as a result
of such breach or threatened breach. In recognition of this fact, Executive agrees that, in the event of such a breach or threatened
breach, in addition to any remedies at law. the Company shall be entitled to equitable relief in the form of specific performance,
temporary restraining order, temporary or permanent injunction or any other equitable remedy that may then be available under the
laws of the State of Texas.


 


14.         Proprietary
Information and Inventions Agreement. Executive will be required, as a condition of employment with the Company, to
sign the Company’s Proprietary Information and Inventions Agreement, a copy of which is attached hereto as Exhibit A.





 



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(a)          For
the avoidance of doubt, the Proprietary Information and Inventions Agreement does not prohibit or restrict Executive (or Executive’s
attorney) from responding to any inquiry about the Agreement or its underlying facts and circumstances by the Securities and Exchange
Commission (SEC), the Financial Industry Regulatory Authority (FINRA), any other self-regulatory organization or governmental entity,
or making other disclosures that are protected under the whistleblower provisions of federal law or regulation. Executive understands
and acknowledges that he does not need the prior authorization of the Company to make any such reports or disclosures and that
he is not required to notify the Company that he has made such reports or disclosures.


 


(b)          
Executive understands that Executive may, without informing the Company prior to any such disclosure, disclose Proprietary Information,
as defined in the Proprietary Information and Inventions Agreement (i) in confidence to a federal, state, or local government official,
either directly or indirectly, or to an attorney, solely for the purpose of reporting or investigating a suspected violation of
law or (ii) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. Additionally,
without informing the Company prior to any such disclosure, if Executive files a lawsuit against the Company for retaliation for
reporting a suspected violation of law, Executive may disclose Proprietary Information to his attorney and use the Proprietary
Information in the court proceeding or arbitration, provided that Executive files any document containing the Proprietary Information
under seal and does not otherwise disclose the Proprietary Information, except pursuant to court order. Without prior authorization
of the Company, however, the Company does not authorize Executive to disclose to any third party (including any government official
or any attorney Executive may retain) any communications that are covered by the Company’s attorney-client privilege.


 


15.         Miscellaneous.


 


(a)          Tax
Matters. All forms of compensation referred to in this letter agreement are subject to reduction to reflect applicable withholding
and payroll taxes and other deductions required by law. You are encouraged to obtain your own tax advice regarding your compensation
from the Company. You agree that the Company does not have a duty to design its compensation policies in a manner that minimizes
your tax liabilities, and you will not make any claim against the Company or the Board related to tax liabilities arising from
your compensation.


 


(b)          Governing
Law; Arbitration.


 


(i)          Governing
Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Texas or applicable federal
law, except that the Federal Arbitration Act shall govern the arbitration clauses of this Agreement.


 


(ii)         Arbitration
of all Disputes. All complaints, causes of action, disputes, claims or controversies (“claims”) between
Executive and Company, including any past, present, or future claims, whether or not arising out of Executive’s employment
(or its termination), that the Company may have against Executive or that Executive may have against any the Company or its officers,
directors, employees or agents, parent, subsidiary affiliated entities, or successors and assigns of any of them, will be resolved
through binding arbitration. The claims covered by this arbitration agreement include all disputes that the Company or Executive
could otherwise pursue in state or federal court including, but not limited to, claims based on any state, federal, or local statute,
regulation or ordinance (including claims for employment discrimination, retaliation or harassment, claims for unpaid wages or
violation of state or federal wage and hour laws), as well as common law claims (including claims for breach of contract or breach
of the implied covenant of good faith and fair dealing, wrongful discharge, defamation, misrepresentation, fraud, and infliction
of emotional distress).


 






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The following claims
are not subject to arbitration under this Agreement: (1) claims for workers’ compensation benefits, state disability benefits,
state unemployment benefits; (2) administrative charges filed with a federal, state or local government office or agency, such
as the Equal Employment Opportunity Commission (“EEOC”) or any comparable state anti-discrimination agency,
or the National Labor Relations Board (“NLRB”); and (3) any claims that, as a matter of law, cannot legally
be subject to arbitration. Nothing in these provisions shall preclude either Executive or the Company from seeking temporary or
injunctive relief in a court prior to determining the claim in arbitration.


 


To the maximum extent
permitted by law, Executive hereby waives any right to bring on behalf of persons other than Executive, or to otherwise participate
with other persons in, any class or collective action (a type of lawsuit in which one or several persons sue on behalf of a larger
group of persons).


 


The arbitration shall
be conducted by a single neutral arbitrator in accordance with the then-current Employment Arbitration and Mediation Procedures
of the American Arbitration Association (“AAA”), which can be viewed at http://www.adr.org/employment. The Company
will provide Executive with a copy of these rules upon request. The arbitration shall take place in the county of the state in
which Executive is or was last employed by the Company, with the understanding the such location is currently Austin, Texas. The
Company will pay the arbitrator’s fee and will bear all administrative charges by AAA. All parties shall be entitled to engage
in reasonable pre-hearing discovery to obtain information to prosecute or defend the asserted claims. Any disputes between the
parties regarding the nature or scope of discovery shall be decided by the arbitrator. The arbitrator shall hear and issue a reasoned
written ruling upon any dispositive motions brought by either party, including but not limited to, motions for summary judgment
or summary adjudication of issues.


 


After the hearing,
the arbitrator shall issue a reasoned written decision setting forth the award, if any, and explaining the basis therefore. The
arbitrator shall have the powder to award any type of relief that would be available in court. The arbitrator’s award shall
be final and binding upon the parties and may be entered as a judgment in any court of competent jurisdiction. In the event of
any conflict in the arbitration procedures set forth in this Agreement and the AAA rules specified above, the AAA rules shall control.


 


Notwithstanding the
foregoing, and regardless of what is provided by AAA’s rules, to the extent that it is legally permissible to do so, the
arbitrator will not have authority or jurisdiction to consolidate claims of different employees into one proceeding, nor shall
the arbitrator have authority or jurisdiction to hear the arbitration as a class action. As noted above, Executive has waived any
right to bring any class or collective action. To the extent that the class or collective action waiver described above is not
enforceable, the issue of whether to certify any alleged or putative class for a class action proceeding must be decided by a court
of competent jurisdiction. The arbitrator will not have authority or jurisdiction to decide class certification or collective action
issues. Until any class certification or collective action issues are decided by the court, all arbitration proceedings shall be
stayed, and the arbitrator shall take no action with respect to the matter. However, once any issues regarding class certification
or collective action have been decided by the court, the arbitrator will have authority to decide the substantive claims.


 






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This arbitration provision
is governed by the Federal Arbitration Act (9 U.S.C. § 1, et seq.) and evidences a transaction involving commerce.
If the Federal Arbitration Act is held not to apply, the arbitration law of the State of Texas shall apply. We intend that this
Agreement be limited to those claims that may legally be subject to a pre-dispute arbitration agreement under applicable law. A
court or arbitrator construing this Agreement may therefore modify or interpret it to render it enforceable.


 


(c)          Entire
Agreement/Amendments. This Agreement contains the entire understanding of the parties with respect to the subject matter hereof
and those incorporated herein.


 


(d)          No
Waiver. The failure of a party to insist upon strict adherence to any term of this Agreement on any occasion shall not be considered
a waiver of such party’s rights or deprive such party of the right thereafter to insist upon strict adherence to that term
or any other term of this Agreement.


 


(e)          Severability.
In the event that any one or more of the provisions of this Agreement shall be or become invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions of this Agreement shall not be affected thereby.


 


(f)          Assignment.
This Agreement and all of Executive’s rights and duties hereunder, shall not be assignable or delegable by Executive. Any
purported assignment or delegation by Executive in violation of the foregoing shall be null and void ab initio and of no force
or effect. This Agreement may be assigned by the Company to a person or entity that, is an affiliate or a successor in interest
to substantially all of the business operations of the Company. Any assignment of this Agreement by the Company or Executive shall
not release the Company or Executive, respectively, of its or his obligations under this Agreement.


 


(g)          Successors;
Binding Agreement. This Agreement shall inure to the benefit of and be binding upon personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees,


 


(h)          Prior
Agreements. This Agreement supersedes all prior agreements and understandings (including verbal agreements) between Executive
and the Company or Imation and/or their affiliates regarding the terms and conditions of Executive’s employment with the
Company and/or its affiliates.


 






    	 	12	 



     


    




 


(i)          Corporate
Opportunities. Executive will submit to the Board all business, commercial and investment opportunities or offers presented
to Executive or of which Executive becomes aware which relate to the businesses of the Company or its subsidiaries as such businesses
of the Company or its subsidiaries exist at any time during the period in which Executive is employed by the Company (“Corporate
Opportunities”). Unless approved by the Board, Executive will not accept or pursue, directly or indirectly, any Corporate
Opportunities on Executive’s own behalf.


 


(j)          Counterparts.
This Agreement may be executed by facsimile or PDF signature and in two (2) or more counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same instrument.


 


(k)          Executive’s
Representations. Executive hereby represents and warrants to the Company that (i) he has entered into this Agreement of his
own free will for no consideration other than as referred to herein, (ii) the execution, delivery and performance of this Agreement
by Executive does not and will not conflict with, breach, violate or cause a default under any contract, agreement, instrument,
order, judgment or decree to which Executive is a party or by which Executive is bound, (iii) Executive is not a party to or bound
by any employment, noncompetition, confidentiality or other similar agreement with any other Person except prior employers, and
Executive represents and warrants that none of said prior agreements prohibit or in any way interfere with Executive’s performance
under this Agreement, and (iv) upon the execution and delivery of this Agreement by the Company, this Agreement will be the valid
and binding obligation of Executive, enforceable in accordance with its terms. Executive hereby acknowledges and represents that
Executive has had the opportunity to consult with independent legal counsel regarding Executive’s rights and obligations
under this Agreement and that Executive fully understands the terms and conditions contained herein, and that the parties have
participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation
arises, this Agreement shall be construed as if drafted jointly by the parties and no presumption or burden of proof shall arise
favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement.


 


(l)          Time
of the Essence. Time shall be of the essence in connection with all payments promised in this Agreement.


 


[Signature Page Follows]


 




    	 	13	 



     


    


 


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


 





	 	“COMPANY”
	 	 
	 	Nexsan Corporation


 


	 	By:	/s/ Danny Zheng
	 	Name:	Danny Zheng
	 	Title:	Secretary


 


	 	“IMATION” (solely as to Sections 3, 4, 9(b) and 10)
	 	 
	 	Imation Corp.


 


	 	By:	/s/ Joseph A. De Perio
	 	Name:	Joseph A. De Perio
	 	Title:	Non-Executive Chairman


 


	 	“EXECUTIVE”
	 	 
	 	/s/ Robert B. Fernander
	 	Robert B. Fernander







 




    	 	14	 



     


    


  


Exhibit
A


 


PROPRIETARY
INFORMATION AND INVENTIONS AGREEMENT


 


The following confirms
my agreement with Nexsan Corporation (“Company”) and I, Robert B. Fernander, that is a material part
of the consideration for my employment by Company:


 


1.          I
have not entered into, and I agree I will not enter into, any agreement either written or oral in conflict with this Agreement
or my employment with Company. I will not violate any agreement with or rights of any third party or. except as expressly
authorized by Company in writing hereafter, use or disclose any own or any third party’s confidential information or intellectual
property when acting within the scope of my employment or otherwise on behalf of Company. Further, I have not retained anything
containing any confidential information of a prior employer or other third party, whether or not created by me.


 


2.          Company
shall own all right, title and interest (including all intellectual property rights of any sort throughout the world) relating
to any and all inventions, works of authorship, designs, know-how, ideas and information made or conceived or reduced to practice,
in whole or in part, by me in connection with my employment with Company to and only to the fullest extent allowed by law (“Inventions”)
and I will promptly disclose all Inventions to Company. This provisions in this Agreement requiring you to assign,
or offer to assign, any of your rights in an Invention shall not apply to an Invention that you developed entirely on your own
time without using the Company’s equipment, supplies, facilities, or trade secret information except for those inventions
that either (A) Relate at the time of conception or reduction to practice of the invention to the Company’s business, or
actual or demonstrably anticipated research or development of the Company; or (B) Result from any work performed by the you for
Company. Without disclosing any third party confidential information. I will disclose anything I believe is excluded by this Agreement
so that the Company can make an independent assessment. I hereby make all assignments necessary to accomplish the foregoing. I
shall assist Company, at Company’s expense, to further evidence, record and perfect such assignments, and to perfect, obtain,
maintain, enforce, and defend any rights specified to be so owned or assigned. I irrevocably designate and appoint Company as
my agent and attorney-in-fact, coupled with an interest and with full power of substitution; to act for and in my behalf to execute
and file any document and to do all other lawfully permitted acts to further the purposes of the foregoing. If I wish to clarify
anything created by me prior to my employment that relates to Company’s actual or proposed business, I have listed it on
the attached disclosure in a manner that does not violate any third party rights or disclose any confidential information. Without
limiting the above or Company’s other rights and remedies, if, when acting within the scope of my employment or otherwise
on behalf of Company, I use or disclose my own or any third party’s confidential information or intellectual property (or
if any Invention cannot be fully made, used, reproduced, or distributed without using or violating the foregoing). Company will
have and I hereby grant Company a perpetual, irrevocable, worldwide, royalty-tree, fully paid-up, non-exclusive, sublicensable
right and license to exploit and exercise all such confidential information and intellectual property rights.


 






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3.          To
the extent allowed by law, the foregoing paragraph includes all rights of paternity, integrity, disclosure and withdrawal and
any other rights that may be known as or referred to as “moral rights,” “artist’s rights,” “droit
moral” or the like (collectively “Moral Rights”). To the extent I retain any such Moral Rights under
applicable law, I hereby ratify and consent to any action that may be taken with respect to such Moral Rights by or authorized
by Company and agree not to assert any Moral Rights with respect thereto. I will confirm any such ratifications, consents and
agreements from time to time as requested by Company.


 


4.          I
agree that all Inventions and all other business, technical and financial information (including, without limitation, the identity
of and information relating to customers or employees) I develop, learn or obtain during the my employment that relate to Company
or the business or demonstrably anticipated business of Company or that are received by or for Company in confidence, constitute
“Proprietary Information.” I will hold in confidence and not disclose or. except within the scope of my employment,
use any Proprietary Information. Upon termination of my employment, I will promptly return to Company all items containing or
embodying Proprietary Information (including all copies), except that I may keep my personal copies of (i) my compensation records,
(ii) materials distributed to shareholders or Directors generally (to the extent I remain a Director) and (iii) this Agreement.
I also recognize and agree that I have no expectation of privacy with respect to Company’s telecommunications, networking
or information processing systems (including, without limitation, stored computer files, email messages and voice messages) and
that my activity and any files or messages on or using any of those systems may be monitored at any time without notice.


 


5.          I
agree that my obligations under this Agreement shall continue in effect after termination of my employment, regardless whether
such termination is voluntary or involuntary on my part, and that Company is entitled to communicate my obligations under this
Agreement to any future employer or potential employer of mine, provided that I receive a copy of such communications in a timely
manner.


 


6.          This
Agreement is fully assignable and transferable by Company, but any purported assignment or transfer by me is void. I
also understand that any breach of this Agreement will cause irreparable harm to Company for which damages would not be an adequate
remedy, and, therefore, Company will be entitled to injunctive relief with respect thereto in addition to any other remedies and
without any requirement to post bond.


 


I HAVE READ THIS
PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT CAREFULLY AND I UNDERSTAND AND ACCEPT THE OBLIGATIONS WHICH IT IMPOSES UPON, ME
WITHOUT RESERVATION.


 


	November 22, 2016	 	/s/ Robert B. Fernander
	 	 	Robert B. Fernander
	 	 	 
	Accepted and Agreed to:	 	 


 


 





	/s/ Danny Zheng	 
	By: Danny Zheng	 
	Title: Secretary	 







 




    	 	16	 



     


    


 


Disclosure
of Inventions





 





	Title	 	Date	 	Identifying Number

or Brief Description
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 







 


Disclosure
of Advisory Activities


 


	Title	 	 
	I-O Switch	 	 
	SSG	 	 
	FLM TV	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 


  


__ No inventions or improvements


 


__ Additional Sheets Attached


 





	Signature of Employee:	/s/ Robert B. Fernander	 


 


	Print Name of Employee:	Robert B. Fernander	 




 


Date: November 22, 2016


 






    	 	17