Document:

EXHIBIT 10.5

 

Employment Agreement between

Nexsan Technologies, Inc. and Philip Black

 

This
EMPLOYMENT AGREEMENT (the “Agreement”) is effective on November 21, 2007
(the “Agreement Date”) between and among Nexsan Corporation (“Holdings”),
Nexsan Technologies, Inc.  (the “Company”)
and Philip Black (“Executive”).

 

WHEREAS,
Executive is currently employed by the Company and Holdings as its President
and Chief Executive Officer;

 

WHEREAS,
the Company, Holdings and Executive entered into an employment agreement
effective as of June 23, 2004, and amendments on June 24, 2004, March 22,
2006 and July 22, 2006;

 

WHEREAS,
the Company and Holdings desire to obtain the continued services of Executive
as its President and Chief Executive Officer;

 

WHEREAS,
the Company, Holdings and Executive each desires to replace the current
employment agreement and amendments to the employment agreement with a new
employment agreement containing the terms and conditions set forth herein;

 

NOW,
THEREFORE, in consideration of the mutual agreements contained herein, the
Company, Holdings and Executive hereby agree as follows:

 

I.              TERM OF
AGREEMENT

 

A                                      The initial term of the Agreement begins
as of the Agreement Date and continues until the second anniversary of the
Commencement Date (the “Term”).

 

B.                                     Commencing on the first Anniversary Date,
if on or before that date the Company and Holdings have not delivered to
Executive, and Executive has not delivered to the Company and Holdings, a
written notice that the Term will not be extended (“Notice of Non-Renewal”),
the Term will be automatically extended each day by one day, until a date which
is one year following the first date, if any, on which the Company and Holding
deliver to Executive or Executive delivers to the Company and Holdings, as the
case may be, a Notice of Non-Renewal.

 

II.            POSITIONS AND DUTIES

 

A.                                   During the Term, Executive will serve as
President and CEO of the Company and Holdings.

 

B.                                     Executive will report solely and directly
to the Company’s and Holdings’ Boards of Directors (“Boards”) and to the
Chairman of the Board of the Company and of Holdings (jointly, the “Chairmen”
and respectively, the “Chairman”).

 

C.                                     Executive is to devote his full business
time to the Company and Holdings in fulfilling his responsibilities for the
functions and operations of the Company as assigned to him by the Boards or the
Chairmen; provided, however, that Executive may participate in
other activities as described below.

 

 

 

 

D.                                    Executive may continue to serve on all
corporate, civic and charitable boards on which he is currently a member as
listed below, provided that such activities do not (i) individually or in
the aggregate materially interfere with Executive’s job duties and
responsibilities or (ii) cause Executive to act in competition with, or to
have a conflict of interest with, Holdings or the Company.  Executive may, with the advance approval of
the Boards, in the future serve on other corporate, civic or charitable boards,
provided that such other service does not individually or in the aggregate
materially interfere with Executive’s job duties and responsibilities.

 

E.                                      Executive is currently a member of the
following corporate, civic and charitable boards:

 

	
  ORGANIZATION

  NAME

  	
   

  	
  POSITION

  	
   

  	
  NATURE OF

  ORGANIZATION

  	
   

  	
  COMPENSATION/

  TIME

  COMMITMENT

  
	
  Simtek

  	
   

  	
  Board
  member

  	
   

  	
  Non-volatile
  memory chips for RAID controller and other apps

  	
   

  	
  Nominal
  - 4 x day meetings a year

  
	
  Storage
  Network Industry Association (SNIA)

  	
   

  	
  Data
  Protection Initiative and ILM Committee Member

  	
   

  	
  Industry
  standards

  	
   

  	
  None/nominal
  time

  

 

III.           BASE SALARY

 

A.                                   The Company and Holdings shall pay
Executive in accordance with its normal payroll practices an annual salary at a
rate of $290,000 per year.

 

B.                                     Annual base salary is subject to
discretionary increase by the Boards, but not decrease.

 

IV.           ANNUAL BONUS

 

A.                                   The Company and Holdings shall pay to
Executive an annual cash bonus (“Annual Bonus”) in accordance with the terms
set each year by the Boards (or the Compensation Committee of the Boards) to
provide a reasonable target, based on reasonable criteria, as percentages of
then current base salary and shall be determined as follows:

 

1.                                       If Executive achieves his target
performance goals for the year, as determined by the Boards (or Compensation
Committees of the Boards), the Annual Bonus payable shall be not less than 50%
of Executive’s base salary for such year.

 

 

2

 

 

2.                                       The actual Annual Bonus payable for a
year may be more or less than the target bonus based on actual performance.

 

3.                                       70% of the bonus will be based on
satisfying Board-approved financial plan of record based upon (1) gross
revenue, (2) gross margin, (3) operating expenses, (4) pre-tax
profit and (5) cash reserves.

 

4.                                       30% of the bonus will be based upon other
business goals as determined by the Boards (or Compensation Committees of the
Boards).

 

5.                                       Except as provided in Section VIII,
Executive must be employed on the last day of the year for which the Annual
Bonus is earned in order to receive the Annual Bonus.

 

6.                                       The Annual Bonus, if any, will be paid
annually upon certification by the Boards (or Compensation Committees of the
Boards) that the performance goals for the year have been satisfied and the
degree to which they have been satisfied, and shall be paid to Executive as
soon as practicable after such annual certification for the year is completed
but in no event later than 21⁄2 months after the end of the year in which such
Annual Bonus was earned.

 

V.            CHANGE OF CONTROL BONUS

 

A.                                   If Executive (i) remains employed by
the Company and Holdings through the closing date of a COC (the “COC Date”) or (ii) if
Executive’s employment is terminated by the Company and Holdings within three (3) months
preceding the signing by Holdings or the Company of a definitive binding agreement
which agreement is performed and results in a COC, subject to normal closing
terms and conditions, unless the Company and Holdings establish that the
principal reason for Executive’s termination of employment is for a reason
unrelated to the COC, Executive will receive a Change of Control Bonus on or as
soon as practicable following the COC Date (but in no event later than 90 days
after the COC Date) in the amount determined in Section V.B. below.

 

B.                                     The amount of the Change of Control Bonus
payable to Executive in the event of a Change of Control is determined based on
the Sales Price (as defined below) received in connection with a COC as
follows:

 

	
  Sales Price

  	
   

  	
  Change of Control Bonus

  	
   

  
	
  (in millions)

  	
   

  	
  (in thousands)

  	
   

  
	
  Less
  than $85

  	
   

  	
  $1,000

  	
   

  
	
  $85

  	
   

  	
  $1,040

  	
   

  
	
  $100

  	
   

  	
  $1,886

  	
   

  
	
  $125

  	
   

  	
  $3,296

  	
   

  
	
  $150

  	
   

  	
  $4,706

  	
   

  
	
  $175

  	
   

  	
  $6,116

  	
   

  
	
  $200

  	
   

  	
  $7,526

  	
   

  
	
  $225

  	
   

  	
  $8,936

  	
   

  
	
  $250

  	
   

  	
  $10,346

  	
   

  
	
  $300

  	
   

  	
  $13,166

  	
   

  

 

 

3

 

 

For Sales Price in
between listed values, lineal interpolation will be used to determine the
amount of the Change of Control Bonus.

 

C.                                     For purposes of this Section V., the
term “Sales Price” means the gross equity valuation of Holdings
immediately prior to the closing of the transaction constituting a COC
determined based on the consideration (in cash or property) paid in connection
with such transaction, but without any reduction to reflect the Company’s or
Holdings’ liability for the payment of this Change of Control Bonus or any
similar bonus payable to any other employee of the Company or Holdings on
account of consummation of a COC.

 

D.                                    Notwithstanding the foregoing, Executive
will not be entitled to receive:

 

1.                                       any portion of the Change of Control
Bonus if there is an IPO prior to the Change of Control Date and Executive
receives the IPO Bonus pursuant to Section VI, or

 

2.                                       the portion of the Change of Control
Bonus that exceeds $925,000 (the “Variable Change of Control Bonus”) unless the
stockholders of Holdings holding at least 75% of the voting power of Holdings’
stock immediately prior to the COC authorize and approve the payment of the
Variable Change of Control Bonus in accordance with regulations issued under Section 280G
of the Internal Revenue Code of 1986, as amended.  Holdings and the Company will use their best
efforts (i) to submit the Variable Change of Control Bonus to Holding’s
stock-holders for approval during the six month period ending on the COC Date
and (ii) to recommend that the shareholders approve and authorize the
payment of the Variable Change of Control Bonus to the Executive.

 

VI.           IPO BONUS SHARES

 

A.                                   If Executive (i) remains employed by
the Company and Holdings through the effective date of an IPO (the “IPO Date”)
or (ii) if Executive’s employment is terminated by the Company and
Holdings within three (3) months prior to the IPO Date, unless the Company
and Holdings establish that the principal reason for Executive’s termination of
employment is for a reason unrelated to the IPO, Executive will receive IPO
Bonus Shares equal to the number of whole shares of 

 

 

4

 

 

common stock of
Holdings (if the IPO is for Holdings’ common stock) or the number of whole
shares of common stock of the Company (if the IPO is for the Company’s common
stock) determined by dividing the IPO Bonus Value determined in Section VI.B.  below by the IPO price (as defined be-low),
with any fraction of a share rounded to the nearest whole share.  Such IPO Bonus Shares will be delivered to
Executive on the next business day following the IPO Date.

 

B.                                     The amount of the IPO Bonus Value will be
determined based on the Pre-IPO Value (as defined below):

 

	
  Pre-IPO Value

  	
   

  	
  IPO Bonus Value

  	
   

  
	
  (in millions)

  	
   

  	
  (in thousands)

  	
   

  
	
  Less
  than $85

  	
   

  	
  $1,000

  	
   

  
	
  $85

  	
   

  	
  $1,686

  	
   

  
	
  $100

  	
   

  	
  $2,532

  	
   

  
	
  $125

  	
   

  	
  $3,942

  	
   

  
	
  $150

  	
   

  	
  $5,352

  	
   

  
	
  $175

  	
   

  	
  $6,763

  	
   

  
	
  $200

  	
   

  	
  $8,172

  	
   

  
	
  $225

  	
   

  	
  $9,582

  	
   

  
	
  $250

  	
   

  	
  $10,992

  	
   

  
	
  $300

  	
   

  	
  $13,812

  	
   

  
	
  $350

  	
   

  	
  $16,632

  	
   

  

 

For Pre-IPO Values
in between listed values, lineal interpolation will be used to deter-mine the
amount of the IPO Bonus Value.

 

C.                                     For purposes of this Section VI.,
the term “Pre-IPO Value” means the gross equity valuation of Holdings
immediately prior to the IPO Date determined based on the IPO Price, but
without any reduction to reflect the Company’s or Holdings’ liability for the
payment of the IPO Stock Bonus or any similar cash or stock bonus payable to
any other employee of the Company or Holdings on account of an IPO.  Notwithstanding the foregoing, if there is a
substantial new equity financing or acquisition that results in the issuance of
at least $5 million in equity securities of Holdings (or in securities that are
convertible into equity securities of Holdings) on or after the Agreement Date,
the Pre-IPO Value shall be reduced by the amount raised in such equity
financing or the value (determined at the time of such acquisition) of the
equity securities (including securities that are convertible into equity
securities) issued in such acquisition.

 

D.                                    The Company or Holdings, as applicable,
shall withhold from the IPO Bonus Shares the number of shares of stock having a
fair market value on the date the IPO Bonus Shares are delivered to the
Executive equal to the amount of Federal, state and local income and employment
taxes to be withheld by the Company and/or Holdings with respect to the IPO Bonus
Shares, and the Company and/or Holding shall pay cash equal to the fair market
value of such withheld shares to the appropriate tax authorities to satisfy
such tax obligations related to the stock transaction.

 

 

5

 

 

E.                                      Notwithstanding the foregoing, Executive
will not be entitled to receive the IPO Bonus Shares if a Change of Control
occurs prior to the effective date of an IPO and Executive receives (or is
entitled to receive) the Change of Control Bonus pursuant to Section V.

 

VII.         BENEFITS AND PERQUISITES

 

A.                                   Executive shall be entitled to
participate in benefit (retirement, welfare and other fringe benefit) plans and
programs, and perquisites on the same terms and conditions as provided to other
similarly-situated senior executives of Holdings and the Company.

 

B.                                     Executive shall be entitled to prompt
reimbursement of his business expenses in accordance with Holdings’ and the
Company’s reimbursement policies.

 

C.                                     Executive shall have four weeks of paid vacation
leave per year.

 

VIII.        SEVERANCE BENEFITS

 

A.                                   If Executive has a termination of
employment during the Term that is by Holdings and the Company without Cause,
or Executive terminates his employment for Good Reason prior to a COC,
Executive shall be entitled to the following:

 

1.                                       immediate payment of any earned but
unpaid base salary and bonus;

 

2.                                       12 months of base salary continuation;
provided, however, that if Executive is a “specified employee” (as determined
in accordance with Treasury Regulation Section 1.409A-1(i) or any
written Company policy implementing such regulation) at the time of his
termination of employment, then his base salary continuation payments that are
otherwise payable to Executive during the six-month period following his termination
of employment shall be reduced if necessary so that the total amount of base
salary continuation payments during such six-month period does not exceed the
amount described in Treasury Regulation Section 1.409A-1(b)(9)(iii)(A) and
the amount, if any, by which base salary continuation payments to Executive are
reduced during such six-month period pursuant to this proviso shall be paid to
Executive in a lump sum payment six months after Executive’s termination of
employment;

 

3.                                       a cash Annual Bonus for the year of
termination (i) paid when the Annual Bonus would otherwise have been paid
and (ii) in an amount equal to the Annual Bonus which would have been paid
for the year of termination had Executive been employed for the full year,
multiplied by a fraction the numerator of which is number of days elapsed
during the year through the date of termination, and the denominator of which
is 365; and

 

 

6

 

 

4.                                       continued participation for 12 months in
Holdings’ and the Company’s benefit plans and programs as described in Section VII
(other than any tax qualified retirement plan or any deferred compensation
plan, program or arrangement).

 

B.                                     For purposes of this Section VIII
and Section IX, a termination of employment means a separation from
service (as defined in regulations under Section 409A of the Internal
Revenue Code of 1986, as amended (the “Code”)).

 

IX.                                TERMINATION
FOR CAUSE, BY EXECUTIVE FOR ANY REASON (OTHER THAN GOOD REASON PRIOR TO A COC),
DUE TO EXECUTIVE’S DISABILITY OR DEATH, OR DUE TO THE EXPIRATION OF THE TERM

 

A.                                   If Executive’s employment is terminated
by Holdings or the Company for Cause, by Executive for any reason (other than
for Good Reason prior to a COC), due to Executive’s disability or death, or at
the expiration of the Term, Executive shall receive immediate payment of any
earned but unpaid base salary and bonus.

 

B.                                     The respective provisions of any employee
benefit plan or perquisite program in which Executive participates shall
control.

 

X.            RESTRICTIVE COVENANTS

 

A.                                   Non-Competition: 
For a one-year period following Executive’s termination of employment
with Holdings and the Company, Executive shall be prohibited from working as an
employee, director, advisor or otherwise providing any other services to any
other organization which produces products or provides services that are
competitive with the products produced by, and services provided by, Holdings
and/or the Company at the time of Executive’s termination of employment.

 

B.                                     Non-Solicitation: 
For a one-year period following Executive’s termination of employment
with Holdings and the Company, Executive shall be prohibited from soliciting
individuals or entities that are employees, customers or vendors of Holdings or
the Company at the time of Executive’s termination of employment.

 

C.                                     Confidentiality: 
Executive shall be prohibited from disclosing or otherwise making public
any proprietary, confidential or secret knowledge, data or other matters used
in, associated with or related to Holdings, the Company or any of their
affiliates, including but not limited to, the current or anticipated business
and the research, development and marketing activities of Holdings, the Company
and any of their affiliates, as well as such information of a party granting
rights to Holdings, the Company or any of their affiliates (“Confidential
Information”), except that Confidential Information shall not include (i) any
information which was or becomes generally available to the public other than
as a result of a wrongful disclosure by Executive, or (ii) any information
compelled to be disclosed by applicable law or administrative regulation;
provided that Executive, to the extent not prohibited from doing so by
applicable law or administrative regulation, shall give the Company and
Holdings written notice of the information to be so disclosed pursuant to
clause (ii) of this sentence as far in advance of its disclosure as is
practicable.

 

 

7

 

 

D.                                    Original Material:  Executive agrees that any Intellectual
Property shall be the property of and belong exclusively to Holdings and the
Company, and that Executive will not make (unless required as part of his
duties to Holdings or the Company) or permit any-one else to read or make any
copy, abstract or summary of any document belonging to Holdings, the Company or
any of its affiliates.  Further,
Executive shall cooperate with Holdings and the Company in disclosing and
providing other reasonable information relating to Intellectual Property and,
following Executive’s termination of employment, Executive shall not use,
duplicate, reveal or take with Executive any Intellectual Property or other
materials of Holdings, the Company or any of their affiliates.  In addition, Executive shall assign to
Holdings and the Company all Intellectual Property and any rights thereto, and
Executive shall take all reasonably necessary steps to allow Holdings and/or
the Company to perfect the ownership of such Intellectual Property.

 

E.                                      Enforcement: 
Executive acknowledges that his receipt of any severance benefits
pursuant to Section VIII of this Agreement and his rights to Change of
Control Bonus and IPO Bonus Shares are conditioned upon his honoring the
above-listed restrictive covenants.  If Executive
should violate the restrictive covenants listed above, Executive shall
immediately (1) forfeit any unpaid severance payments or benefits and any
rights to receive the Change of Control Bonus and IPO Bonus Shares and (2) shall
repay any such amounts or value previously received.  If Holdings and/or the Company has to bring
le-gal action to enforce these provisions and prevails, Executive shall
reimburse Holdings and/or the Company (as applicable) for all legal fees and
expenses incurred in connection with such action.

 

XI.           MISCELLANEOUS

 

A.                                   Mitigation/Offset Required: 
Executive shall be required to take reasonable actions to seek other
employment (similar to, or better than, the employment described herein in
terms of position and compensation), and to take any other reasonable action to
mitigate severance payments by Holdings and the Company under Section VIII;
provided that Executive shall not be required to seek other employment that
would require a commute of more than 10 miles greater distance than that of
Executive’s present residence to the Company’s current offices in Thousand
Oaks, California.  In addition, if
Executive commences other employment or self-employment while receiving
severance benefits under Section VIII, his cash severance benefits shall
be offset by any amounts earned through such other employment during the
12-month severance period and any duplicative welfare benefits shall also be
subject to offset.

 

 

8

 

 

B.                                     Indemnification: 
Holdings and the Company shall indemnify Executive to the fullest extent
permitted by their by-laws and applicable law.

 

C.                                     D&O Coverage: 
Holdings and the Company shall provide directors’ and officers’
insurance coverage during Executive’s employment not less than the level
maintained for the other executive officers of the Company and Holdings and of
the type and amount appropriate for a company similar to the Company and
Holdings.

 

D.                                    Other Agreements: 
By execution of this Agreement, Executive hereby warrants that such
execution does not violate any valid or binding contracts to which Executive is
a party or any other obligations of Executive.

 

XII.         KEY DEFINITIONS

 

“Cause” means (1) an unauthorized use or
disclosure of Holdings and the Company’s confidential information or trade
secrets, which use or disclosure causes material harm to Holdings and the
Company, (2) a material breach of any agreement between Executive and
Holdings and the Company, (3) a material failure to comply with Holdings
and the Company’s written policies or rules of which Executive had notice,
(4) commission of a felony under the Laws of the United States or any
state thereof or a misdemeanor involving moral turpitude, (5) a failure to
perform assigned duties after receiving written notification of such failure
from the Boards, provided that such assigned duties were commensurate with his
role as CEO and were reasonable in nature, (6) irresponsible, unauthorized
acts or any willful misconduct, gross negligence or willful failure to act
which has, or can reasonably be expected to have, a material adverse effect on
the business, financial condition or performance, reputation or prospects of
Holdings and the Company, or (7) any other errors, acts or omissions which
constitute cause under applicable state law.

 

“Change
of Control”
or “COC” means any of the following
events:

 

·                  A sale of Holding’s or the Company’s assets
comprising more than half of the value of all of Holding’s or the Company’s
assets.

 

·                  Any person or entity acquiring more than 50%
of Holdings’ or the Company’s common and preferred stock, other than by a person
who is a then-current Major Shareholder. 
For this purpose, a “Major Shareholder” shall be Beechtree Capital and
its associated Nexsan investors, VPVP, RRE or GESFID and their respective
affiliates, or any person or entity con-trolled, directly or indirectly, by
such Major Shareholder.

 

“Good
Reason” means
the occurrence of any one of the following events:

 

·                  a material diminution in Executive’s Base
Salary;

·                  a material diminution in Executive’s
authority, duties or responsibilities, including a failure to maintain
Executive as the President and Chief Executive Officer of the Company and
Holdings or any successor of the Company and Holdings;

 

 

9

 

 

·                  a transfer of Executive’s principal place of
employment to a location that requires a commute of more than 10 miles greater
distance than that of Executive’s present residence to the Company’s current
offices in Thousand Oaks, California; or

·                  any other action or inaction that constitutes
a material breach of by the Company or Holdings of this Agreement;

 

provided, that an act or omission shall not
constitute Good Reason unless (i) Executive gives the Company and Holdings
or their successor written notice of the act or omission claimed to constitute
Good Reason within ninety (90) days after the occurrence or failure that is
claimed to constitute Good Reason, (ii) the Company and/or Holdings (as
applicable) or their successor fails to remedy the act or omission claimed to
constitute Good Reason within thirty (30) days of the Company’s and Holdings’
or their successor’s receipt of such notice and (iii) Executive’s employment
is terminated within twelve (12) months after the act or omission that
constitutes Good Reason.

 

“IPO” means an initial public offering of the
common stock of Holdings or the Company.

 

“IPO
Price” means
the price at which a share of common of stock of the Company or Holdings, as
applicable, is offered in an IPO.

 

“Intellectual
Property”
means any information, inventions, innovations, discoveries, improvements,
ideas, developments, methods, designs, reports, charts, drawings, analyses,
reports, concepts, original works of authorship or similar information relating
to the business of Holdings, the Company or any of their affiliates, including
methods, technology, customer lists, reports, records, brochures, instructions,
manuals, computer apparatus, programs and manufacturing techniques, whether or
not protectable by patent or copyright, that have been originated, developed,
made, conceived, authored or reduced to practice by Executive alone or jointly
with others during Executive’s employment with Holdings and the Company or
their respective successors or assigns.

 

 

10

 

 

IN
WITNESS WHEREOF, the parties have executed this Agreement to be effective as of
the Agreement Date.

 

	
  EXECUTIVE:

  	
   

  	
  NEXSAN TECHNOLOGIES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/
  Philip Black

  	
   

  	
  /s/
  Gene Spies

  	
   

  
	
  Philip Black

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:
  

  	
  Gene
  Spies

  	
   

  
	
   

  	
   

  	
  Title:

  	
   CFO

  	
   

  
	
  November 21,
  2007

  	
   

  	
  Date:
  November 21, 2007

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  NEXSAN TECHNOLOGIES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/
  George Weiss

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:
  

  	
  George
  Weiss

  	
   

  
	
   

  	
   

  	
  Title:

  	
   Chairman

  	
   

  
	
   

  	
   

  	
  Date:
  November 21, 2007

  
						

 

 

11EXHIBIT 10.6

 

EMPLOYMENT
AGREEMENT

 

This Employment Agreement (the “Agreement”) by
and between AESIGN EVERTRUST INC., a company incorporated federally under the
Canada Business Corporations Act (the “Company”), Nexsan Corporation, a
Delaware corporation (“Nexsan”), and Thomas F. Gosnell (“Executive”)
is hereby entered into and effective as of March 24, 2005

 

RECITALS

 

WHEREAS, the Company wishes to employ Executive as its
Chief Executive Officer and Executive wishes to be employed by the Company in
such capacity, pursuant to the terms and conditions set forth herein.

 

NOW, THEREFORE, in consideration of the mutual
promises, terms, covenants and conditions set forth herein and the performance
of each, it is hereby agreed as follows:

 

AGREEMENTS

 

1.                                       Employment and Duties.

 

(a)                                  The Company hereby employs Executive in
the position Chief Executive Officer of the Company (and such other positions
consistent with his status as the Chief Executive Officer of the Company as
shall be reasonably assigned to Executive by the Company’s Board of Directors
(the “Board”)).  Executive shall
have all of the normal and customary responsibilities, duties and authorities
customarily accorded to, and expected of, such positions including those as may
be established by the Board; provided that the nature of such responsibilities,
duties and authorities shall not be materially inconsistent with Executive’s
positions and duties hereunder or with those customarily accorded to, and
expected of, a chief executive officer of a company similar to the Company.

 

(b)                                 Executive hereby accepts this employment
terms and conditions contained herein and agrees to devote his fill business
time, attention and efforts to promote and further the business of the
Company.  Executive shall not, during the
Term of his employment hereunder (as defined in Section 4 hereof), be
engaged in any other business activity pursued for gain, profit or other
pecuniary advantage without the prior written consent of the Board.  Notwithstanding the foregoing limitations, provided
that such activities neither interfere with the discharge of the duties and
responsibilities of Executive hereunder nor violate the terms of Section 3
hereof, Executive shall be able to devote occasional business time to
charitable, industry trade group and community activities and making personal
passive investments in publicly traded securities in general and in competitors
of the Company and of Nexsan; provided that Executive shall not in any event
own more than 2% of the issued and outstanding securities of any such publicly
traded company.

 

(c)                                  Executive faithfully shall adhere to,
execute and fulfill all policies lawfully established by the Board acting in
good faith.

 

2.                                       Compensation. 
For all services rendered by Executive in any capacity required
hereunder, the Company shall compensate Executive as follows:

 

 

(a)                                  Base Salary. 
During the term hereof, Executive shall he paid a base salary at a rate
of US$200,000 per year (the “Base Salary”), payable on a regular basis
in accordance with the Company’s standard payroll procedures, but not less
frequently than monthly.

 

(b)                                 Vacation. 
Executive shall be entitled to four (4) weeks (i.e.,
twenty (20) days) paid vacation per year.

 

(c)                                  Incentive Bonus Plan. 
During the Term hereof, Executive shall be eligible to receive a fiscal
year end performance bonus (the “Bonus”) based upon the Company’s level
of achievement of pre-established performance goals that shall be determined by
the Board, based on gross revenues and net operating margin.  For the fiscal year ending December 31,
2005, Executive shall be entitled to a Bonus equal to 50% of his Base Salary in
the event the Company’s gross revenues equals or exceeds US$752,000 and
the Company’s earnings before interest, taxes, depreciation, and amortization
does not exceed a loss of US$2,044,776. 
In subsequent years, the Bonus will be based on gross revenues and net
operating margin determined by the Board (acting in good faith) based on the
Board approved budget for such year (excluding extraordinary gains).  The Bonus will continue to be 50% of base
salary if the relevant targets are met. 
The Bonus, if any, will be paid to Executive in accordance with policies
established by the Board, from time to time, with respect to the method and
timing for payment of bonuses to executives of the Company generally.

 

(d)                                 Benefits and Other Compensation. 
Executive shall be entitled to receive additional benefits and
compensation from the Company in such form and to such extent as specified
below:

 

(i)                                     The Company shall provide Executive with
coverage under its current health, hospitalization, disability, dental, vision,
life, and other insurance plans, and under its retirement and other benefit
plans that the Company may have in effect from time to time on the same terms
generally provided to other senior executives of the Company from time to
time.  In addition.  the Company and: or Nexsan shall include
Executive as a covered insured under its Directors and Officers insurance
policy and any other liability or similar insurance policies, if provided to
other senior executives of the Company or Nexsan.

 

(ii)                                  In the event the Executive relocates to
Southern California at the request of the Board (it being agreed between the
parties that the Executive has no obligation to so relocate), the Company shall
reimburse Executive for all relocation expenses actually, reasonable and
properly incurred by him up to a maximum of US$50,000 and his Base Salary (and
therefore the Bonus) shall be increased by 25%.

 

(iii)                               Reimbursement for all business travel and
other out-of-pocket expenses actually, reasonably and properly incurred by
Executive in the performance of his services pursuant to this Agreement
(including Internet and telecom charges related to the Executive’s home office,
which the parties acknowledge the Executive is entitled to maintain).  All reimbursable expenses shall be
appropriately documented in reasonable detail by Executive upon submission of
any request for reimbursement, and in a format and manner consistent with the
Company’s expense reporting policy, and shall be reimbursed on a monthly basis.

 

2

 

(e)                                  Payment. 
Except as otherwise provided herein, payment of all compensation and
benefits to Executive hereunder shall be made in accordance with the relevant
Company policies in effect from time to time, including normal payroll
practices, and shall be subject to all applicable employment and withholding
taxes and source deductions.

 

(f)                                    Cessation of Employment. 
In the event Executive shall cease to be employed by the Company for any
reason, Executive’s compensation and benefits shall cease on the date of such
events except as otherwise provided herein.

 

3.                                       Non-Competition Agreement.

 

(a)                                  Executive shall not, without the prior
written consent of the Board, during any Term and for the Applicable Period,
for himself or on behalf of, or in conjunction with, any other person, persons,
company, partnership, corporation or business of whatever nature, either
directly or indirectly:

 

(i)                                     engage as an employee, officer, director,
shareholder, member, manager, owner, partner, joint venturer, trustee, whether
as an Executive, independent contractor, agent, consultant or advisor, or as a
sales representative, in any business anywhere in the territory of the province
of Québec and the state of California (the “Territory”), that is involved in
the activities of those segments of the data storage business known as the
Information Lifecycle Management, archiving and Content-Addressable Storage
(the “Activities”);

 

(ii)                                  solicit any person who is at that time,
or at any time within the preceding ninety (90) days of the time of the
proposed call was, an employee of the Company or consultants to the Company,
for the purpose, or with the intent, of enticing such employee or consultant
away from, or out of, the employ of the Company or to terminate their
consulting agreement with the Company or for the purpose of hiring such
employee or consultant for Executive or any other Person; provided  however, that this Section 3(a)(ii) shall
not apply to any person who independently contacts Executive during the
Applicable Period in response to a general solicitation by a person or entity
with which Executive is affiliated published in a newspaper or other
publication of general circulation that is not specifically targeted at the
Company’s employees; or

 

(iii)                               solicit any person or entity that is at
that time, or that was, at any time within the twelve (12) months prior to that
time, a customer of the Company, for the purpose of soliciting or selling
products or services in competition with the Company.

 

3

 

For the purposes of this
Agreement the term “Applicable Period” shall mean twelve (12) months
from the date Executive ceases to be an employee of the Company, regardless of
the reason for separation.

 

(b)                                 Because of the difficulty of measuring
economic losses to the Company as a result of a breach of the foregoing
covenant, and because of the immediate and irreparable damage that could be
caused to the Company for which it would have no other adequate remedy,
Executive agrees that the foregoing covenant may he enforced by the Company in
the event of breach by him, by injunctions and restraining orders, without the
necessity of posting a bond or other security.

 

(c)                                  It is agreed by the parties that the
foregoing covenants in this Section 3 impose a reasonable restraint on
Executive in light of the activities, business and plans of the Company on the
date of the execution of this Agreement; but it is also the intent of the
Company and Executive that such covenants be construed and enforced in
accordance with any change in the activities, business or plans of the Company
throughout the term of this Agreement.  Therefore,
Executive and the Company will enter into, at the request of the Company and as
needed, amendments of such covenants in accordance with Exhibit A of this
Agreement, more particularly but without limiting the generality of the
foregoing, subsection 3(a) of this Agreement, in order to give effect to
this intent with respect to either of the Territory and the Activities,

 

(d)                                 The covenants in this Section 3 are
severable and separate, and the unenforceability of any specific covenant or
part thereof shall not affect the remainder of such covenant or provisions of
any other covenant.

 

(e)                                  All of the covenants in this Section 3
shall be construed as an agreement independent of any other provision in this
Agreement, and the existence of any claim or cause of action of Executive
against the Company, whether predicated on this Agreement or otherwise, shall
not constitute a defense to the enforcement of such covenants; provided that
the Company is not in breach of any obligation with respect to the payment of
Severance (as defined in Section 4(d) hereof) and the Company’s
breach of such obligation is a result of circumstances other Executive’s breach
of Section 3 or Section 6 hereof.

 

(f)                                    Notwithstanding any of the foregoing, if
any applicable law shall reduce the time period during which Executive shall be
prohibited from engaging in any competitive activity described in Section 3(a) hereof,
the period of time for which Executive shall be prohibited pursuant to Section 3(a) hereof
shall be the maximum time permitted by law.

 

4.                                       Term; Termination; Rights on Termination. 
The term of this Agreement shall begin on the date hereof and shall
continue in full force and effect until such time as this Agreement is
terminated in accordance with the provisions hereof This Agreement and
Executive’s employment may he terminated in any one of the following ways:

 

(a)                                  Death. 
Executive’s employment hereunder shall immediately terminate upon his
death, and the Company shall pay to Executive’s estate all salary and Bonus
amounts earned with respect to the Executive’s prior full year of employment
but unpaid as of the date of his death, and all other unpaid benefits for
period prior to the date of his death.

 

4

 

(b)                                 Disability. 
If, as a result of the Executive’s incapacity due to physical or mental
illness, the Executive shall not have performed his duties hereunder on a
full-time basis for three (3) consecutive months or for one hundred twenty
(120) days in any twelve (12) month period, the Executive’s employment under
this Agreement may be terminated by the Company upon thirty (30) days written
notice if Executive is unable to resume his full time duties at the conclusion
of such notice period.  The Executive’s
compensation during any period of disability prior to the effective date of
such termination shall be the amounts normally payable to him in accordance
with his then current annual Base Salary, reduced by the amounts of disability
pay, if any, paid to the Executive under any Company disability program or
personal disability insurance.  The
Executive shall not be entitled to any further salary or other compensation
from the Company for any period subsequent to the effective date of such
termination, except for all salary, pay in lieu of accrued vacation time, and
Bonus amounts earned with respect to the Executive’s prior full year of
employment but unpaid as of the effective date of such termination, all other
unpaid benefits for periods prior to the effective date of his termination, and
any other pay and benefits, if any, in accordance with then existing severance
policies of the Company and Company benefit plans.

 

(c)                                  Termination by Company

 

(i)                                     For Cause. 
The Company may terminate the Agreement immediately upon written notice
to Executive for good cause, which shall mean: (i) Executive’s willful
misconduct or gross negligence in the performance or nonperformance of’ any of
Executive’s material duties and responsibilities hereunder; (2) Executive’s
continued and willful refusal promptly to follow any lawful direction of the
Board; (3) Executive’s willful misconduct or gross negligence in the
performance or intentional nonperformance of numerous of his duties and
responsibilities (regardless materiality) under this Agreement, which in the
aggregate, constitute a material nonperformance hereunder; (4) Executive’s
willful misrepresentation, fraud, alcohol or illegal drug abuse, or material
misconduct with respect to the business or affairs of the Company, which
materially and adversely affects, or can reasonably be expected so to affect,
the operations, prospects or reputation of the Company; (5) Executive’s
conviction of or pica of nolo contendere to
a felony or other crime involving moral turpitude: (6) Executive’s
material breach of any fiduciary duty owed to the Company or breach of the
provisions of Section 3 or material breach of Section 6 hereof, which
breach is not cured within thirty (30) days of written notice to Executive or
is incapable of cure; (7) any other willful and material breach by
Executive of this Agreement that is not cured within thirty (30) days of
written notice to Executive or is incapable of cure; or (8) any other
errors, acts or omissions or any other reason which constitutes termination for
cause under applicable law.  In the event
of a termination for cause, as contemplated in this subsection 4(c)(i), the
Company shall have no further obligation to make any payments to Executive or
to provide any other benefits to him hereunder except for any Base Salary, pay
in lieu of accrued Vacation time, reimbursement or other benefits that have
accrued or vested but not been paid as of the effective date of such
termination.

 

5

 

(ii)                                  Without Cause. 
The Company may at any time during any Term terminate this Agreement, if
such termination is approved by the Board. 
In the event of a termination by the Company without cause, the Company’s
obligations hereunder shall be as follows: (1) paying Severance to
Executive in accordance with subsection 4(e) hereof; (2) paying for
accrued and unused Vacation time owing to the Executive.  (3) paying any earned (with respect to
the Executive’s prior full year of employment), but unpaid Bonus; (4) continuing
Executive’s participation through the Severance Period in any health benefits
in which Executive was participating on the effective date of such termination;
save and except for long term disability coverage, and (5) providing to
Executive any other benefits hereunder that have accrued or vested but have not
been paid as of the effective date of such termination.  Except for pay in lieu of accrued and unused
vacation time which shall be made forthwith, the payments hereunder shall be
made as and when such payments would have been made had Executive’s employment
not have terminated hereunder.  The
Company’s obligation to pay the amount referred to in subsections 4(c)(ii)(1) and
4(c)(ii)(1) shall he subject to Executive’s duty to mitigate his damages
following the date on which this Agreement is terminated in accordance with
this subsection 4(c)(ii).  Except as
provided herein, all other obligations of the Company under this Agreement
shall cease as of the date of termination. 
The payments and other benefits due to Executive hereunder shall be
inclusive of all statutory or other legal sever entitlements of Executive.

 

(d)                                 Termination by Executive. 
Executive may at any time during the Term terminate his employment
hereunder upon One Hundred Twenty (120) days prior written notice to the Company.

 

(e)                                  Severance. 
if Executive’s employment is terminated by the Company pursuant to Section 4(c)(ii) the
Company shall, subject to Executive’s execution of a release, whereby the
Executive releases the Company from all statutory and other claims or rights
that Executive may have against the Company and its current and former
officers, directors, and employees, including, but not limited to, all
statutory claims or rights relating to Executive’s employment and/or
termination, (but excluding any claims or rights relating to the Company’s
obligations to pay Executive Severance due and owing to him hereunder), and
further including, but without limiting the generality of the foregoing, the
execution by the Executive of all cotenants in section 3(a) of this
Agreement for the Severance Period, in a form reasonably acceptable to the
Company (a “Release”), continue to pay Executive (1) his then current Base
Salary and (2) fifty percent (50%) of the Bonus paid, agreed to be paid,
or awarded for the prior year (the “Severance”) for a period of twelve (12)
months (the “Severance Period”).  The
Severance is expressly understood and agreed not to be salary or payroll
compensation to an Executive, but rather, severance to a former Executive.  Notwithstanding anything herein to the
contrary, if Executive has breached a provision of Section 6 of this
Agreement, or has breached a provision of Section 3 or Section 5 of
this Agreement and Executive has failed to cure such breach within thirty (30)
days of notice from the Company describing such breach in reasonable detail,
then the Severance payments shall terminate immediately.

 

6

 

5.                                       Inventions.  Executive
shall disclose promptly to the Company any and all significant conceptions and
ideas for inventions, improvements and valuable discoveries, whether patentable
or not, that have been conceived or made prior to the date hereof or that are
conceived or made by Executive following the date hereof solely or jointly with
another, during any Term and that are directly related to the business or
activities of the Company whether or not conceived during or after regular
business hours or using any property or facilities of the Company.  Executive hereby assigns and agrees to assign
all of his right, title and interest in and to any such intellectual property
to the Company or its nominee and Executive hereby expressly waives any and all
moral rights he may have in or in relation to such intellectual property.  Executive covenants and agrees to sign all
such documents, instruments or agreements and to perform all such acts or
otherwise assist the Company as are reasonably necessary in order to perfect
and give effect to the foregoing assignment of intellectual property rights
and, to the extent applicable, waiver of moral rights therein.  Executive agrees that all such materials that
he develops or conceives and/or documents related thereto during such period
shall be deemed works made-for-hire for the Company within the meaning of the
copyright laws of the United States or any similar or analogous law or statute
of any other jurisdiction, and accordingly, the Company shall he the sole and
exclusive owner for all purposes for the distribution, exhibition, advertising
and exploitation of such materials or any part of them in all media and by all
means now known or that may hereafter be devised, throughout the universe time
in perpetuity.  Executive agrees that in
furtherance of the foregoing, he shall disclose, deliver and assign to the Company
all seen conceptions, ideas, improvements and discoveries and shall execute all
such documents, including patent, trademark and copyright applications, as the
Company reasonably shall deem necessary to further document the Company’s
ownership right therein and to provide the Company the full and complete
benefit thereof.  Should any arbitrator
or court of competent jurisdiction ever hold that such materials do not
constitute works made-for-hire, Executive hereby irrevocably assigns to the
Company, and agrees that the Company shall be the sole and exclusive owner of,
all right, title and interest in and to all such materials, including the
patents, trademarks, copyrights and any other proprietary rights arising
therefrom.  Executive reserves no rights with
respect to any such materials, and hereby acknowledges the adequacy and
sufficiency of the compensation paid and to be paid by the Company to Executive
for the materials and the contributions he will make to the development of any
such information or materials.  Executive
agrees to cooperate with all lawful efforts of the Company to protect the
Company’s rights in and to any or all of such information and materials and
will, at the request of the Company, execute any and all instruments or
documents reasonably necessary desirable in order to register, establish,
acquire, prosecute, maintain, perfect or defend the Company’s rights in and to
such information and materials.

 

6.                                       Confidential Information and Trade
Secrets.  Executive acknowledges and agrees that all
Confidential Information, Trade Secrets and other property delivered to, or
compiled by, Executive by or on behalf of the Company or its representatives,
vendors or customers that pertain to the business of the Company shall be, and
remain, the property of the Company and he subject at all times to its
discretion and control.  Executive agrees
that he shall maintain strictly the confidentiality of, and shall not disclose
any such Confidential Information or Trade Secrets to any person without the prior
written consent of the Board.

 

7

 

For purposes hereof, the parties agree that “Confidential
Information” means and includes:

 

·                  All business or financial information, plans,
processes and strategies, market research and analyses, projections, financing
arrangements, franchising arrangements and agreements, consulting and sales
methods and techniques, expansion plans, forecasts and forecast assumptions,
business practices, operations and procedures, marketing and merchandising
information, distribution techniques, customer information and other business
information, including records, designs, patents, business plans, financial statements,
manuals, memoranda, lists and other documentation respecting the Company;

 

·                  All information and materials that are proprietary and
confidential to a third party and that have been provided to the Company by
such third party for the Company’s use; and

 

·                  All information derived from such Confidential
Information.

 

Confidential Information
shall not include information and materials that are (i) already, or
otherwise become, known by, or generally available to, Executive or the public,
other than as a result of an act or omission by the Executive in breach of the
provisions of this Agreement or any other applicable agreement between the
Executive and the Company or by another party in violation of an obligation of
confidentiality to the Company; (required to be disclosed for Executive not to
be in violation of any applicable law or regulation; (iii) required to be
disclosed by Executive in connection with the enforcement of any of his rights
under this Agreement or any other agreements between Executive and the Company;
or (iv) required to be disclosed pursuant to an order of, or are necessary
to be disclosed in connection with any litigation or other proceeding in which
testimony is compelled before, any court or like entity or governmental
authority; provided that in any such case, Executive shall provide the Company
with prompt notice of such request, order or intended disclosure, cooperate
reasonably with the Company in resisting or limiting, as appropriate, the
disclosure of such Confidential information via a protective order or other
appropriate legal action, and shall not make disclosure pursuant thereto until
the Company has had a reasonable opportunity to resist such disclosure, unless
he is ordered otherwise pursuant to an order of a court of competent
jurisdiction or he is advised by his counsel that such disclosure must he made
at such time to avoid any legal penalty.

 

For purposes hereof, the
term “Trade Secret” shall mean trade secrets of the Company, including,
without limitation, the whole or any portion or phase of any, scientific or
technical information, design, process, formula, concept, data organization,
manual, other system documentation, or any improvement of any thereof, in any
case that is valuable and secret (in the sense that it is not generally known
to the Company’s competitors).

 

Notwithstanding the
foregoing restrictions and limitations set forth in this Section 6, the
terms Confidential Information and Trade Secrets shall not include any
materials or information disclosed by Executive in the good faith performance
and exercise of his responsibilities, duties and authority in the ordinary
course hereunder.

 

7.                                       Return of Company Property, Termination
of Employment.  At such time as Executive’s employment with
the Company is terminated for any reason under Section 4(b) or 4(c) hereof
he shall he required to participate in an exit interview for the purpose of
assuring a proper termination of his employment and his obligations
hereunder.  On or before the actual date
of such termination, Executive shall return to the Company all of the Company’s
records, materials and other physical objects obtained during his employment
with the Company, including, without limitation, all Comp at credit cards and
access keys and all materials, containing or derived from any Trade Secrets or
Confidential Information.

 

8

 

8.                                       No Prior Agreements. 
Executive hereby represents and warrants to the Company that the
execution of this Agreement by Executive and his employment by the Company and
the performance of his duties hereunder will not violate or be a breach of any
agreement with a former employer, client or any other person or entity.  Further, Executive agrees to indemnify the
Company for, and hold the Company harmless from, and against, all claims by any
third party that such third party may now have, or may hereafter come to have,
against the Company based upon, or arising out of, any violation of breach or
any noncompetition, invention or secrecy agreement between Executive and such
third party that was in existence as of the date of this Agreement, and other
expenses directly related thereto incurred by the Company, including, but not
limited to, reasonable fees and expenses of investigation.

 

9.                                       Binding Effect; Assignment. 
This Agreement shall be binding upon, inure to the benefit of and be
enforceable by the parties hereto and their respective heirs, legal
representatives, successors and assigns. 
Executive understands that he has been selected for employment by the
Company on the basis of his personal qualifications, experience and skills
Executive agrees, therefore, that he cannot assign all or any portion of his
performance obligations under this Agreement.

 

10.                                 Complete Agreement. 
Executive has no oral representations, understandings or agreements with
the Company or any of its affiliates or any of its officers, directors or
representatives covering the same subject matter as this Agreement.  This written Agreement is the final, complete
and exclusive statement and expression of the agreement between the Company and
Executive regarding the subject matter contained herein and of all the terms of
this Agreement.  It cannot be varied,
contradicted or supplemented by evidence of any prior or contemporaneous oral
or written agreements and any such prior agreements are hereby superseded by
this Agreement.

 

11.                                 Notices.

 

(a)                                  Any notice, designation, communication,
request, demand or other document, required or permitted to he given or sent or
delivered hereunder to any party hereto shall be in writing and shall be
sufficiently given or sent or delivered if it is:

 

(i)                                     delivered personally to the Executive or,
in the case of the Company, to the address and person noted below,

 

(ii)                                  sent to the party entitled to receive it
by registered mail, postage prepaid, mailed in Canada (or the United States in
the event that the executive relocated to Southern California), or

 

(iii)                               sent by telecopy machine.

 

9

 

(b)                                 Notices shall he sent to the following
addresses or telecopy numbers:

 

(i)                                     in the case of the Executive,

 

(ii)                                  in the case of the Company,

 

c/o Nexsan Corporation

21700 Oxnard Street, Suite 1850

Woodland Hills, CA 91367

Attention:
President, Nexsan Corporation

 

or to such other address
or telecopier number as the party entitled to or receiving such notice,
designation, communication, request, demand or other document shall, by a
notice given in accordance with this section, have communicated to the party
giving or sending or delivering such notice, designation, communication,
request, demand or other document.

 

(c)                                  Any notice, designation, communication,
request, demand, and or other document given or sent or delivered as aforesaid
shall:

 

(i)                                     if delivered as aforesaid, be deemed to
have been given, sent, delivered and received on the date of delivery;

 

(ii)                                  it sent by mail as aforesaid, he deemed
to have been given, sent, delivered and received (but not actually received) on
the third Business Day following the date of wailing, unless at any time
between the date of mailing and the third Business Day thereafter there is a
discontinuance or interruption of regular postal service, whether due to strike
or lockout or work slowdown, affecting postal service at the point of dispatch
or delivery or any intermediate point, in which case the same shall be deemed
to have been given, sent, delivered and received in the ordinary course of the
mails, allowing for such discontinuance or interruption of regular postal
service; and

 

(iii)                               if sent by telecopy machine, be deemed to
have been given, sent, delivered and received on the date the sender receives
the telecopy answer back confirming receipt by the recipient.

 

12.                                 Severability; Pleadings. 
It is the intention of the parties that the provisions hereof shall be
enforceable to the fullest extent permitted under applicable law, and that the
unenforceability of any provision hereof, or any portion thereof, shall not
render unenforceable or otherwise impair any other provisions or portions
thereof.  If any provision of this
Agreement is determined by a court of competent jurisdiction to be
unenforceable, void or invalid in whole or in part this Agreement shall be
deemed amended to delete or modify, as necessary, the offending provisions or
portions thereof and to 

 

10

 

alter the bounds thereof,
including specifically, any time, place and manner restrictions contained in
any of the restrictive covenants contained herein, in order to render it valid
and enforceable.  In any event, the
balance of this Agreement shall be enforced to the fullest extent possible
without regard to such unenforceable, void or invalid provisions or part
thereof.  The Section headings
herein are for reference purposes only and are not intended any way to
describe, interpret, define or limit the extent or intent of the Agreement or
of any part hereof.

 

13.                                 Company Actions. 
Executive acknowledges that, except as provided in Section 3(e) hereof,
in any action by the Company to enforce the provisions of Sections 3, 5, 6, 7
or 8 of this Agreement, claims asserted by Executive against the Company
arising out of his employment with the Company or otherwise shall not
constitute a defense to enforcement of his obligations hereunder.

 

14.                                 Arbitration. 
Any unresolved dispute or controversy arising under or in connection
with this Agreement (excluding specifically, however, claims and counterclaims
of the Company arising out of any breach by Executive of the provisions of
Sections 3, 5, 6, or 7) shall be settled exclusively by arbitration in Québec
under the Civil Code of Procedure by an arbitrator
who is mutually agreeable to the parties hereto, or.  if the parties cannot agree on the selection
of the arbitrator, then before three arbitrators, one of which shall be
appointed by Buyer, one of which shall be appointed by the Sellers acting
together, and the third of which shall be chosen by the rules under the Civil Code of Procedure such arbitrator or arbitrators
hereinafter referred to as the “Arbitrator”).  The decision in such arbitration shall be
final and binding on the parties, and judgment upon such decision may be
entered in any court having jurisdiction thereof.  The parties hereby agree that the Arbitrator
shall he empowered to enter an equitable decree mandating specific performance
of this Agreement.  The parties hereto
further agree that the loser any such arbitration (as determined by the
Arbitrator) shall pay for the winner’s (as determined by the Arbitrator) costs
and expenses related to the arbitration (including, without limitation,
reasonable attorney’s fees).  Prior to
the award of costs by the Arbitrator, each of the Employer and the Executive
shall advance half the costs and fees of the Arbitrator, which amount paid
shall be refunded or repaid by the losing party to the winning party upon such
determination by the Arbitrator.

 

15.                                 Governing Law and Forum. 
This Agreement shall in all respects be construed according to the laws
of the province of Québec, and all matters in dispute, except for all matters
the parties have given exclusive jurisdiction to the Arbitrator in accordance
with section 14 of this Agreement, shall be referred to the superior courts of
such jurisdiction.  The prevailing party
in any legal proceeding shall be entitled to recovery of his or its reasonable
legal fees and costs.  If the Executive
relocates his residence in accordance with subsection 2(d) of this
Agreement or otherwise, the Executive hereby irremediably agrees and consents
to execute, as requested by the Company and at its sole discretion, an
amendment to this Agreement necessary conform their employment relationship to
the new jurisdiction, as appropriate.

 

16.                                 Counterparts. 
This Agreement may he executed in counterparts and any party hereto may
execute any such counterpart, each of which when executed and delivered shall
be deemed to be an original and all of which counterparts taken together shall
constitute but one and the same instrument. 
This Agreement shall become binding when all counterparts taken together
shall have been executed and delivered (which deliveries may be by facsimile)
by the parties.

 

11

 

17.                                 Modifications. 
This Agreement may not be changed, waived, discharged or terminated
orally, but only by an instrument in writing signed by the party against which
enforcement of such change, waiver, discharge or termination is sought, or his
or its duly authorized representative or officer.  No waiver by Executive or the Company of any
breach of any provision hereof will be deemed a waiver of any prior or
subsequent breach of the same or any other provision.  The failure of Executive or the Company to
exercise any right provided herein will not be deemed on any subsequent
occasions to be a waiver of any right granted hereunder to either of them.

 

18.                                 Survival.  The
provisions of Sections and 6 hereof shall survive termination of this Agreement
for any reason.

 

19.                                 EXECUTIVE ACKNOWLEDGES THAT, BEFORE
SIGNING THIS AGREEMENT, HE WAS GIVEN AN OPPORTUNITY TO READ IT, CAREFULLY
EVALUATE IT, AND ASK ANY QUESTIONS HE MAY HAVE HAD REGARDING IT OR ITS
PROVISIONS.  EXECUTIVE ALSO ACKNOWLEDGES
THAT HE HAD THE RIGHT TO HAVE THIS AGREEMENT REVIEWED BY INDEPENDENT LEGAL
COUNSEL OF HIS CHOOSING AND THAT THE COMPANY GAVE HIM A REASONABLE PERIOD OF
TIME TO DO SO IF HE SO WISHED.  EXECUTIVE
FURTHER ACKNOWLEDGES THAT HE IS NOT BOUND BY ANY AGREEMENT THAT WOULD PREVENT
HIM FROM PERFORMING HIS DUTIES AS SET FORTH HEREIN, NOR DOES HE KNOW OF ANY
OTHER REASON WHY HE WOULD NOT BE ABLE TO PERFORM HIS DUTIES AS SET FORTH
HEREIN.

 

20.                                 Guarantee by Parent Company. 
Nexsan, the ultimate parent corporation of the Company, hereby
guarantees, to the fullest extent possible, all of the obligations of the
Company hereunder.

 

21.                                 Language.  The parties
have required that this Agreement and all documents relating or attached hereto
be drawn up in English.  Les parties ont
demondé que cette convention ainsi que tous les documents qui s’y rattachent
soient redigés en anglais.

 

[SIGNATURES APPEAR ON
NEXT PAGE]

 

12

 

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

 

	
   

  	
   

  	
  COMPANY:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  AESIGN EVERTRUST INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Philip Black

  
	
   

  	
   

  	
   

  	
  Name: Philip Black

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  NEXSAN:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  NEXSAN CORPORATION:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Philip Black

  
	
   

  	
   

  	
   

  	
  Name: Philip Black

  
	
   

  	
   

  	
   

  	
  Title: CEO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  )

  	
  EXECUTIVE:

  
	
   

  	
  )

  	
   

  
	
   

  	
  )

  	
   

  
	
   

  	
  )

  	
  /s/ Thomas F. Gosnell

  
	
  Witness:

  	
  )

  	
  THOMAS F. GOSNELL

  
	
   

  	
   

  	
   

  
	
  Name:

  	
  )

  	
   

  

 

13

 

EXHIBIT A

 

FORM OF AMENDMENT TO
EMPLOYMENT

 

Memorandum of Agreement
re: Amendment to Employment Agreement entered between AESIGN EVERTRUST INC., a
company incorporated federally under the Canada Business Corporations Act (the “Company”), and Thomas F. Gosnell (“Executive”), is hereby entered into
and effective as of,                                         ,
              .

 

WHEREAS an Employment Agreement was entered into
between the Company and the Executive on               
2005, (the “Agreement”);

 

AND WHEREAS the parties in accordance with Sub-Section 3
c) of the Agreement, have agreed to modify the Agreement;

 

NOW THEREFORE this Agreement witnessed that in
consideration of mutual covenants and agreements set out in the Employment
Agreement and herein, the panics hereto hereby agree as follows:

 

1.                                      INTERPRETATION

 

(a)                                  As of the date of signature of the
present amendment, this Amendment number         
is deemed to be an integral part of the Agreement and the Agreement shall be
read and interpreted as incorporating all modifications contained herein;

 

(b)                                 All of the provisions of the Agreement
not affected by the present Amendment number         
shall remain in full force as drafted

 

2.                                      MODIFICATIONS

 

(a)                                  Article 3.(a) (i) is
rescinded and replaced by the following article:

 

3.(a) (i) engage, as an employee, officer,
director, shareholder, member, manager, owner, partner, joint venture, trustee,
whether as an Executive, independent contractor, agent, consultant or advisor,
or as a sales representative, in any business anywhere in the territory of       
(the “Territory”), that is involved in the activities of       
(the “Activities”);

 

3.                                      GENERAL

 

(a)                                  This Agreement shall he construed in
accordance with the laws of                                       .

 

(b)                                 Executive acknowledges and agrees that
the amendments to the Territory and Activities herein are reasonable and
properly required for the adequate protection of the business of the Company.

 

14

 

(c)                                  Executive acknowledges that before
signing this Memorandum of Amendment, he was given an opportunity to read it,
carefully evaluate it, and to ask any questions he may have had regarding same
or its provisions.

 

(d)                                 Executive also acknowledges that he has had
the right to have this Memorandum of Amendment reviewed by an independent legal
counsel of his choice and that the Company gave him a reasonable period of time
to do so if he so wished.

 

(e)                                  The parties acknowledge that they have
required that this Agreement and all related documents be prepared in the
English language.  Les parties
reconnaissent avoir exiger que la présente convention et tous les documents
connexes soient rédigés dans la langue anglaise.

 

IN WITNESS THEREOF, the parties hereby agree to terms and
conditions of this Amendment to the Employment Agreement as of the date first
above written.

 

	
  COMPANY:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  AESIGN EVERTRUST INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  EXECUTIVE:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  )

  	
   

  
	
  Witness:

  	
  )

  	
  THOMAS F. GOSNELL

  
	
  Name:

  	
  )

  	
   

  

 

15

 

 

AMENDMENT TO
EMPLOYMENT AGREEMENT

 

THIS AMENDMENT TO EMPLOYMENT AGREEMENT (“Amendment”),
dated as of November 14, 2007, is made by and among NEXSAN TECHNOLOGIES
CANADA INC., a company incorporated federally under the Canada Business
Corporations Act (the “Company”), NEXSAN CORPORATION, a Delaware
corporation (“Nexsan”), and THOMAS F. GOSNELL (the “Executive”).

 

WHEREAS, the Company, Nexsan and the Executive entered
into a certain Employment Agreement dated March 24, 2005 (the “Employment
Agreement”); and

 

WHEREAS, the Company, Nexsan and the Executive desire
to amend the Employment Agreement as provided herein.

 

1.             Definitions.  Unless otherwise specifically defined herein,
all capitalized terms used in this Amendment shall have the meaning ascribed
thereto in the Employment Agreement.

 

2.             Amendment to Employment
Agreement.  The bonus
provisions of the Employment Agreement are hereby clarified as follows, the
same to be read in conjunction with and as an amendment to Section 2(c) of
the Employment Agreement (replacing the third, fourth and fifth sentences of
such section in their entirety):

 

Commencing with calendar years ending December 31,
2007, the Executive shall be entitled to a Bonus in an amount up to 50% of his
Base Salary (the “Target Bonus Amount”), calculated as follows:  (i) in the event Nexsan’s gross
consolidated revenues for such year equals or exceeds US$56,008,000 for the
calendar year ending December 31, 2007 or equals or exceeds amounts for
subsequent calendar years as determined herein, the Executive shall be entitled
to 75% of the Target Bonus Amount; and (ii) if Nexsan’s earnings before
interest, taxes, depreciation, and amortization (“EBITDA”) exceed
US$957,000 for the calendar year ending December 31, 2007 or equals or
exceeds amounts for subsequent calendar years as determined herein, the
Executive shall be entitled to 25% of the Target Bonus Amount.  In subsequent years, the Bonus will be based
on the achievement of gross revenue and EBITDA targets prepared by Nexsan’s CEO
in consultation with the Executive, both acting reasonably with respect to the
same, and submitted to the Board of Directors of Nexsan for approval, it being
understood and agreed that the targets will be based on the Board approved
budget for such year (excluding extraordinary gains).  The Target Bonus Amount will continue to be
50% of Executive’s Base Salary and shall be allocated 75% to achievement of the
gross revenue target and 25% to achievement of the EBITDA target.  The Bonus, if any, will be paid to the
Executive in accordance with policies established by the Board of Directors of
Nexsan, from time to time, with respect to the method and timing for payment of
bonuses to executives of Nexsan generally. 
For purposes herein, (A) “Gross Revenue Target” shall mean the
gross revenue target for a specific calendar year prepared as set forth herein,
which shall be, for calendar year ending December 31, 2007, as set forth
in clause (i) above,

 

 

and (B) “EBITDA
Target” shall mean the EBITDA target for a specific calendar year prepared
as set forth herein, which shall be, for the calendar year ending December 31,
2007, as set forth in clause (ii) above.

 

Upon achieving a minimum of 75% of the Gross Revenue
Target (the “Minimum Gross Revenue Target”), the Executive will be
entitled to payment of 75% of the Target Bonus Amount under clause (i) above.  As Nexsan’s actual gross revenues for such
year increases from the Minimum Gross Revenue Target, for every percentage
point achieved above the Minimum Gross Revenue Target, the percentage of the
Target Bonus Amount under clause (i) shall increase by the same percentage
point.  In no event shall the Executive
be entitled to a Target Bonus Amount under clause (i), if Nexsan’s actual
gross revenues for such year is less than the Minimum Gross Revenue
Target.  Upon achieving 100% of the Gross
Revenue Target, the Executive is entitled to payment of 100% of that portion of
the Target Bonus Amount payable under clause (i) above.

 

Upon achieving a minimum of 75% of the EBITDA Target
(the “Minimum EBITDA Revenue Target”), the Executive will be entitled to
payment of 75% of the Target Bonus Amount under clause (ii) above.  As Nexsan’s earnings before interest, taxes,
depreciation, and amortization for such year increases from the Minimum EBITDA
Target, for every percentage point achieved above the Minimum EBITDA Revenue
Target, the percentage of the Target Bonus Amount under clause (ii) above
shall increase by the same percentage point. 
In no event shall the Executive be entitled to a Target Bonus Amount
under clause (ii) above, if Nexsan’s earnings before interest, taxes,
depreciation, and amortization for such year is less than the Minimum EBITDA
Target.  Upon achieving 100% of the
EBITDA Target, the Executive is entitled to payment of 100% of that portion of
the Target Bonus Amount payable under clause (ii) above.

 

3.             Full Force and
Effect.  The parties agree that all terms of the
Employment Agreement not otherwise amended hereunder shall remain in full force
and effect.

 

4.             Severability.  If any provision of this Amendment shall to
any extent be declared illegal or unenforceable by a court of competent
jurisdiction, then the remainder of this Amendment, or the application of such
provision in circumstances other than those as to which it is so declared
illegal or unenforceable, shall not be affected thereby, and each provision of
this Amendment shall be valid and enforceable to the fullest extent permitted
by law.

 

5.             Modifications.  This Amendment may not be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed by
the party against which enforcement of such change, waiver, discharge or
termination is sought, or his or its duly authorized representative or officer.

 

6.             Entire Agreement.  This Amendment together with the Employment
Agreement forms the entire agreement between the parties hereto with respect to
the subject matter contained herein and therein.  No agreements or representations, oral or
otherwise, express or implied, with

 

 

2

 

 

respect to the subject
matter hereof have been made by either party which are not expressly set forth
in this Amendment or the Employment Agreement.

 

7.             Arbitration.  Any unresolved dispute or controversy arising
under or in connection with this Amendment shall be settled exclusively by
arbitration in accordance with Section 14 of the Employment Agreement.

 

8.             Governing Law.  This Amendment shall in all respects be
construed according to the laws of the province of Québec.

 

9.             Counterpart Originals.  This Amendment may be executed in
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.

 

10.           Binding Effect.  All of the terms and provisions of this
Amendment shall be binding upon and shall inure to the benefit of, and be
enforceable by, the parties hereto and their respective heirs, executors,
administrators, successors and assigns.

 

11.           Assignment.  The rights and obligations of the Executive
under this Amendment shall not be assignable by the Executive.

 

12.           Language. 
The parties have required that this Agreement be drawn up in
English.  Les parties ont demandé
que cette convention ainsi que tous les documents qui s’y rattachent soient rédigés
en anglais.

 

13.           THE EXECUTIVE ACKNOWLEDGES
THAT THE EXECUTIVE HAS CAREFULLY READ AND CONSIDERED ALL CLAUSES OF THIS
AMENDMENT AND HAS HAD AN ADEQUATE OPPORTUNITY TO CONSULT INDEPENDENT COUNSEL OF
THE EXECUTIVE’S CHOOSING.  THE EXECUTIVE
ACKNOWLEDGES THAT THE EXECUTIVE HAS RECEIVED A FULL AND COMPLETE COPY OF THE
TEXT OF THIS AMENDMENT PRIOR TO THE EXECUTIVE’S EXECUTION THEREOF.

 

[The Remainder of this Page is Intentionally Left Blank]

 

 

3

 

 

 

IN
WITNESS WHEREOF, the parties have executed this Amendment to Employment
Agreement as of the date first above written.

 

	
   

  	
  NEXSAN TECHNOLOGIES CANADA INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Philip Black

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Philip Black

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  

 

	
   

  	
  NEXSAN CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Philip Black

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Philip Black

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  President

  

 

 

	
   

  	
  THE EXECUTIVE

  
	
   

  	
   

  
	
   

  	
  /s/ Thomas F. Gosnell

  
	
   

  	
  Thomas F.
  Gosnell

  

 

 

4

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00141-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00141-of-00352.parquet"}]]