Document:

ex1032k093015.htm

	  	 	
Exhibit 10.32

	
MASTER FINANCIAL ASSISTANCE REPAYMENT AGREEMENT

	 	
РАМОЧНОЕ СОГЛАШЕНИЕ

О ВОЗВРАТЕ ФИНАНСОВОЙ ПОМОЩИ

	 	 	 
	
This MASTER FINANCIAL ASSISTANCE REPAYMENT AGREEMENT (“Agreement”) is made as of January 11, 2016, between CASPIAN GEO-CONSULTING SERVICES LLP, a legal entity established under the laws of the Republic of Kazakhstan, registered address: 149 Kyz Zhibek St., Almaty, (“CGS”) represented by its Director Mr. Nurlan Nurmuhanbetovich Khamzin acting on the basis of its Charter, and CASPIAN SERVICES, INC., a legal entity incorporated under the laws of the State of Nevada, USA, with its principal place of business located at 2319 Foothill Drive, Suite 160, Salt Lake City, Utah 84109, USA, (“CSI”) represented by its President Mr. Alexey Sergeyevich Kotov.

	 	
Настоящее РАМОЧНОЕ СОГЛАШЕНИЕ О ВОЗВРАТЕ ФИНАНСОВОЙ ПОМОЩИ (“Соглашение”) заключено «11» января 2016 года между ТОО «КАСПИАН ГЕО-КОНСАЛТИНГ СЕРВИСЭС («CASPIAN GEO-CONSULTING SERVICES»)», юридическим лицом, учрежденным в соответствии с законодательством Республики Казахстан, зарегистрированное по адресу: г. Алматы, ул. Кыз Жибек, д. 149 («CGS»), в лице Директора г-на Хамзина Нурлана Нурмуханбетовича, действующего на основании Устава, и корпорацией «CASPIAN SERVICES», юридическим лицом, зарегистрированным в соответствии с законодательством штата Невада (США), с основным местом деятельности по адресу: 2319 Foothill Drive, Suite 160, Salt Lake City, Utah 84109, USA, (“CSI”) в лице Президента г-на Котова Алексея Сергеевича.

	 	 	 
	
Recitals

	 	
Преамбула

	
A.           From November 12, 2014, through September 2, 2015, CSI provided financial assistance to CGS in the aggregate amount of KZT 633,500,000 (the “Financial Assistance”) pursuant to nine financial assistance agreements (the “Financial Assistance Agreements”).

	 	
А.В период с 12 ноября 2014 года по 2 сентября 2015 года CSI предоставила CSG финансовую помощь на общую сумму 633 500 000 тенге («Финансовая помощь») в соответствии с девятью договорами о финансовой помощи («Договоры о финансовой помощи»).

	 	 	 
	
B. The Financial Assistance was used by CGS to explore for gold ore within the Shoyimbai Deposit located in the Karaganda Oblast of the Republic of Kazakhstan (the “Deposit”) and to prove the reserves of the Deposit so that CGS and the holders of the exploration license on the Deposit could prepare the required submission to apply for a subsoil use contract for the production of gold ore from the Deposit (the “Subsoil Use Contract”).

 

	 	
В.Финансовая помощь была использована CGS для проведения разведки золотоносных руд в пределах месторождения Шойымбай, расположенного в Карагандинской области Республики Казахстан (“Месторождение”), а также для целей подтверждения запасов Месторождения, что позволило CGS и держателям лицензии на разведку Месторождения подготовить требуемую заявку на заключение контракта на недропользование на добычу золотоносной руды на Месторождении (“Контракт на недропользование”).

 

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C.           The application for the Subsoil Use Contract has been submitted to the competent authority of the Republic of Kazakhstan and the parties are in the process of reviewing and finalizing the Subsoil Use Contract.

	 	
С.Заявка на заключение Контракта на недропользование была подана в компетентный орган Республики Казахстан и стороны сейчас находятся в процессе согласования и окончательной доработки Контракта на недропользование.

	 	 	 
	
D.           Upon grant of the Subsoil Use Contract, CGS plans to pursue commercial production of gold ore from the Deposit (the “Project”).  CGS will hold a 50% interest in the Subsoil Use Contract and the Project and the remaining ownership will be held by the former holders of the exploration license on the Deposit.

	 	
D. После присуждения ему Контракта на недропользование, CGS планирует начать промышленную добычу золотоносной руды на Месторождении («Проект»). CGS будет иметь 50% доли участия в Контракте на недропользование и в Проекте, а оставшаяся часть доли участия будет принадлежать бывшим держателям лицензии на разведку Месторождения.

	 	 	 
	
E.           As of the date of this Agreement, CGS has made payments to CSI to reduce the total outstanding balance owed to CSI to KZT 543,500,000.

	 	
Е.По состоянию на дату настоящего Соглашения, CGS произвел определенные выплаты в пользу CSI, в результате которых  его общая задолженность перед CSI уменьшилась до суммы, равной 543 500 000 тенге.

	 	 	 
	
F.           In August 2015, the National Bank of the Republic of Kazakhstan changed its monetary policy to make the Kazakhstan Tenge a free-floating currency which has resulted in a significant devaluation in the Kazakhstan Tenge since the policy change.

	 	
F. В августе 2015 года Национальный Банк Республики Казахстан изменил свою денежно-кредитную политику и сделал тенге свободно плавающей валютой, что привело к значительной девальвации тенге со времени вышеупомянутого изменения политики.

	 	 	 
	
G.           CGS and CSI wish to enter into this Agreement to consolidate the amounts owed under the Financial Assistance Agreements into a single US dollar denominated amount and to establish the terms and conditions of the repayment of that amount.

	 	
G.           CGS и CSI желают заключить настоящее Соглашение, чтобы консолидировать задолженность по Договорам о финансовой помощи в единую сумму, номинированную в долларах США, и согласовать условия и положения погашения такой суммы.

	 	 	 
	
Agreement

	 	
Соглашение

	
In consideration of the foregoing and the representations, warranties, covenants, and agreements contained herein, and intending to be legally bound hereby, the Parties agree as follows:

	 	
В учетом вышеизложенного и заявлений, гарантий, договоренностей и соглашений, содержащихся в настоящем Соглашении, и с намерением быть юридически связанными настоящим Соглашением, Стороны договорились о нижеследующем:

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ARTICLE I – CURRENCY CONVERSION

	 	
СТАТЬЯ I - КОНВЕРТАЦИЯ ВАЛЮТ

	
Section 1.01 – Currency Conversion

	 	
Раздел 1.01 - Конвертация валют

	
CGS may make payments to CSI pursuant to this Agreement in US dollars (“USD”) or Kazakhstan Tenge (“KZT”).  In the event CGS makes a payment in KZT, the USD equivalent of the KZT payment will be determined based on the prevailing USD/KZT exchange rate determined by the National Bank of the Republic of Kazakhstan (the “Prevailing Exchange Rate”) on the date payment is received by CSI.

	 	
CGS вправе производить платежи в пользу CSI по настоящему Соглашению в долларах США («USD») или в тенге («KZT»). В случае, если CGS производит оплату в тенге, долларовый эквивалент оплаты в тенге будет определяться на основе превалирующего курса обмена доллара США на тенге, определенного Национальным банком Республики Казахстан («Превалирующий обменный курс») на дату получения CSI оплаты.

	 	 	 
	
ARTICLE II – OUTSTANDING AMOUNT

	 	
СТАТЬЯ II - СУММА ЗАДОЛЖЕННОСТИ

	 	 	 
	
Section 2.01 – Outstanding Amount

	 	
Раздел 2.01 – Сумма задолженности

	
The outstanding amount due and owing by CGS to CSI as of the date of this Agreement is USD 2,195,000 (the “Outstanding Amount”.)

	 	
Сумма задолженности, причитающейся к выплате CGS в пользу CSI на дату настоящего Соглашения, составляет 2 195 000 долларов США («Сумма задолженности»).

	 	 	 
	
Section 2.02 – Minimum Monthly Payment

	 	
Раздел 2.02 - Минимальный ежемесячный платеж

	
On the last day of each month, commencing on January 31, 2016 and continuing through November 30, 2016, CGS shall make a minimum monthly payment of KZT 50,000,000 to CSI by wire transfer (the “Minimum Monthly Payment”) to reduce the Outstanding Amount.  CGS may, in its discretion, make larger monthly payments without incurring any penalty.

	 	
В последний день каждого месяца, начиная с 31 января 2016 года и вплоть до 30 ноября 2016 года, CGS обязано производить минимальный ежемесячный платеж в размере 50 000 000 тенге в пользу CSI путем межбанковского перевода (далее - “Минимальный ежемесячный платеж”), чтобы уменьшить Сумму задолженности. CGS вправе, по своему собственному усмотрению и без выплаты каких-либо взысканий, производить ежемесячные платежи в сумме, превышающей вышеуказанную.

 

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Section 2.03 – Final Payment

	 	
Раздел 2.03 - Окончательный платеж

	
By no later than December 30, 2016, CGS shall repay in full the unpaid balance of the Outstanding Amount to CSI by wire transfer (the “Final Payment”).  In order to facilitate CGS making the Final Payment, CSI shall notify CGS of the unpaid balance of the Outstanding Amount by no later than December 15, 2016.  The failure of CSI to deliver such notice does not waive CGS’s obligation to timely make the Final Payment.

	 	
Не позднее 30 декабря 2016 года CGS обязано погасить в полном объеме оставшуюся неоплаченной часть Суммы задолженности перед CSI путем межбанковского перевода (“Окончательный платеж”). Для того, чтобы способствовать CGS в совершении Окончательного платежа, CSI обязано не позднее, чем 15 декабря 2016 года, подать уведомление CGS с указанием размера  Суммы задолженности, оставшейся неоплаченной. Если CSI не подаст такое уведомление, это не освобождает CGS от обязательства своевременно произвести Окончательный платеж.

	 	 	 
	
Section 2.04 – Quarterly Determination of Outstanding Amount

	 	
Раздел 2.04 – Ежеквартальное определение размера Суммы задолженности

	
No later than the 15th day following the end of each fiscal quarter of CSI, CSI shall notify CGS of the unpaid balance of the Outstanding Amount.  In the event CGS disagrees with CSI’s computation of the unpaid balance of the Outstanding Amount, CGS shall have the right, no later than the 10th day following notification by CSI, to submit to CSI its computation of the unpaid balance of the Outstanding Amount for consideration by CSI.  CSI may, but is under no obligation to, change its determination of the unpaid balance of the Outstanding Amount. CSI’s final determination of the unpaid balance of the Outstanding Amount shall be conclusive for purposes of this Agreement.

	 	
Не позднее 15 дня после завершения каждого своего финансового квартала, CSI уведомляет CGS о размере неоплаченного остатка Суммы задолженности. В случае, если CGS не согласен с исчисленной CSI размером неоплаченного остатка Суммы задолженности, CGS вправе не позднее, чем на 10-й день после получения им уведомления от CSI, представить на рассмотрение CSI свои вычисления размера неоплаченного остатка Суммы задолженности. CSI вправе (но не обязана) откорректировать свои вычисления размера неоплаченного остатка Суммы задолженности. Окончательное определение CSI размера неоплаченного остатка суммы задолженности является определяющим для целей настоящего Соглашения.

 

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ARTICLE III –  PARTICIPATION INTEREST

	 	
СТАТЬЯ III – ДОЛЯ УЧАСТИЯ

	
Section 3.01 – Participation Interest

	 	
Раздел 3.01 - Доля участия

	
CGS shall pay CSI 20% of the total amount received by CGS, (which in no event shall be less than 10% percent of the total amount distributed to the holders of the Subsoil Use Contract) from the sale of gold ore from the Deposit (the “Participation Interest”), from the date of this Agreement until seven years from the date of commencement of production following a commercial discovery at the Deposit.  CGS shall cause the Participation Interest payment to be made on a monthly basis by wire transfer to CSI simultaneously with payments made to CGS (the “Participation Interest Payment”).  CSI may not sell, transfer or assign the Participation Interest without the prior written consent of CGS.

	 	
CGS уплачивает CSI 20% общей суммы, полученной CGS (но ни в коем случае не меньше, чем 10% от общей суммы, распределенной между держателями Контракта на недропользование), от продажи золотоносной руды с Месторождения («Доля участия»), с даты заключения настоящего Соглашения и на протяжении семи лет с даты начала добычи после коммерческого обнаружения на Месторождении. CGS обеспечивает ежемесячную Оплату за Долю участия путем межбанковского перевода в пользу CSI, в тот момент, когда CGS само получает оплату («Оплата за Долю участия”). CSI не вправе продавать, передавать или переуступать Долю участия без предварительного письменного согласия CGS.

	 	 	 
	
Section 3.02 – Conversion/Exchange of Participation Interest

	 	
Раздел 3.02 - Преобразование/обмен Доли участия

	
In the event CGS, at any time from the date of this Agreement until the expiration of the Participation Interest, shall,  (i) make a public offering of its equity interests or otherwise create a public market for its equity interests; or (ii) place its interest in the Subsoil Use Contract, the Project or the Deposit into an entity that has an existing public market for its equity interests (in whatever form), or that seeks to make a public offering or to otherwise create a public market for its equity interests, CSI shall have the right, but not the obligation, within 30 days of receipt of notice from CGS following the completion of such public offering or creation of a public market, to convert its Participation Interest into a 12.5% equity interest, on a fully diluted basis, in the public entity (the “Conversion Right”).

	 	
В случае, если CGS в любое время с даты подписания настоящего Соглашения до истечения срока действия Доли участия, (i) произведет публичное размещение своих долевых ценных бумаг или иным образом создаст открытый рынок для своих долевых ценных бумаг; или (ii) разместит свою долю участия в Контракте на недропользование, в Проекте или в Месторождении в предприятии, которое уже имеет открытый рынок для своих долевых ценных бумаг (в любой форме), или намерено сделать публичное предложение, или иным образом создать открытый рынок для своих долевых интересов, CSI имеет право (но не обязательство) в течение 30 дней с момента получения уведомления от CGS после завершения такого публичного размещения или создания открытого рынка, преобразовать свою Долю участия в 12,5% акций капитала, на полностью разводненной основе, в такой публичной компании («Право на преобразование»).

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In the event CGS, at any time from the date of this Agreement until the expiration of its Participation Interest, elects to sell its interest in the Subsoil Use Contract or the Project, CSI shall have the right, but not the obligation, to exchange its Participation Interest for 12.5% of the total proceeds of such sale received by CGS (the “Exchange Right”).  CGS shall provide notice to CSI of its election to sell its interest in the Subsoil Use Contract or the Project no later than 10 business days prior to the closing date of such sale.  If CSI elects to exercise its Exchange Right, CSI shall notify CGS of such election no later than five business days following receipt of notice from CGS.  In the event CSI elects to exercise its Exchange Right, CGS shall cause 12.5% of the total proceeds received by CGS to be made by wire transfer to CSI simultaneously with payments made to CGS.  The failure of CGS to timely notify CSI as provided herein shall not bar CSI from exercising its Exchange Right.

	 	
В случае, если CGS в любое время с даты подписания настоящего Соглашения и до истечения срока действия своей Доли участия, примет решение продать свои интересы в Контракте на недропользование или в Проекте, CSI имеет право (но не обязательство) обменять свою Долю участия на 12,5% общей выручки от такой продажи, полученной CGS («Право на обмен»). CGS предоставляет уведомление CSI о своем решении продать свою долю участия в Контракте на недропользование или в Проекте не позднее, чем за 10 рабочих дней до даты закрытия сделки по такой продаже. Если CSI решит воспользоваться своим Правом на обмен, CSI уведомляет CGS о таком решении не позднее, чем через пять рабочих дней после получения уведомления от CGS. В случае, если CSI решает воспользоваться своим Правом на обмен, CGS обязано обеспечить выплату путем межбанковского перевода 12,5% от общего объема выручки, полученной CGS, в пользу CSI, в тот момент, когда CGS само получает оплату. Если CGS своевременно не подаст такое уведомление CSI, как это предусмотрено настоящим Соглашением, это не будет препятствовать CSI в осуществлении своего Права на обмен.

	 	 	 
	
Section 3.03 – Retirement of Participation Interest

	 	
Раздел 3.03 - Изъятие Доли участия

	
Unless CSI has converted the Participation Interest as provided in Section 3.02, during the period from the date CGS has repaid in full the Outstanding Amount, including any Default Penalties, until January 9, 2018, CGS shall have the right to retire the Participation Interest in exchange for a lump sum payment by wire transfer to CSI of USD 1,825,000, or if paid in KZT, in the KZT equivalent of USD 1,825,000 based on the Prevailing Exchange Rate on the date payment is received by CSI.

	 	
В случае, если CSI не преобразовала Долю участия, как это предусмотрено в Разделе 3.02, в течение периода, начинающегося с даты, в которую CGS погасило в полном объеме Сумму задолженности (включая любые Штрафы за неисполнение обязательств), и продолжающегося до 9 января 2018 года, CGS вправе изъять Долю участия в обмен на единовременную выплату, совершаемую путем межбанковского перевода в пользу CSI суммы в размере 1 825 000 долларов США, или, если платеж производится в тенге, то суммы в тенге, эквивалентной 1 825 000 долларам США, на основе Превалирующего обменного курса на дату получения CSI оплаты.

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ARTICLE IV – AFFIRMATIVE COVENANTS

	 	
СТАТЬЯ IV – ГАРАНТИИ СОВЕРШЕНИЯ ОПРЕДЕЛЕННЫХ ДЕЙСТВИЙ

	
Section 4.01 – Conduct of Business

	 	
Раздел 4.01 – Ведение хозяйственной деятельности

	
CGS shall carry out the Project and conduct its business with due diligence, efficiency and in a commercially reasonable manner, in accordance with sound mining, engineering, financial and business practices, maintaining expenses and reserves within reasonable and customary levels and in compliance with all applicable laws, including all money laundering laws.

	 	
CGS осуществляет Проект и ведет свою хозяйственную деятельность добросовестно, эффективно и коммерчески разумным образом, в соответствии со рациональными методами добычи и инженерными, финансовыми и хозяйственными практиками, поддерживая свои расходы и резервы на разумных и общепринятых уровнях и в соответствии со всеми применимыми законами, включая все законы против отмывания денег.

	 	 	 
	
Section 4.02 – Environmental and Social Compliance

	 	
Раздел 4.02 – Соблюдение природоохранного и социального законодательства

	
CGS shall carry out the Project in accordance with the environmental, health and safety regulations and standards in effect from time to time in the Republic of Kazakhstan.  CGS shall not undertake any hazardous waste disposal activities as part of its business operations.  CGS shall observe all applicable laws and standards on employment.

	 	
CGS осуществляет Проект в соответствии с правилами и стандартами по экологии, охране здоровья и безопасности труда, действующими в Республике Казахстан. CGS не должно предпринимать никаких действий по утилизации опасных отходов в рамках своей хозяйственной деятельности. CGS обязано соблюдать все применимые законы и стандарты по трудовой занятости.

 

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Section 4.03 – Books and Records

	 	
Раздел 4.03 – Бухгалтерские книги и отчеты

	
CGS shall maintain books of account and other records adequate to present fairly the financial position, financial performance and cash flows of the Project and the results of the Project’s operations in conformity with generally accepted accounting principles.  Such books and records shall be retained for at least three years following the calendar year to which they pertain, during which time CSI, or its appointed agents, shall have the right at CSI’s expense, upon 15-day notice, not more frequently than quarterly, to inspect such books and records during normal business hours to verify the payments made or compliance in other respects under this Agreement.  In the event such inspection reveals an underpayment, CGS shall resolve the underpayment with CSI within 15 days from its receipt of written notice of such underpayment.

 

	 	
CGS ведет бухгалтерский учет и прочие учетные документы таким образом, чтобы надлежащим отражать финансовое положение, финансовые результаты и движение денежных средств по Проекту, а также результаты деятельности по Проекту, в соответствии с общепринятыми принципами бухгалтерского учета. Такие бухгалтерские книги и отчеты должны храниться в течение не менее трех лет после окончания того календарного года, к которому они относятся, и в течение этого времени CSI или его назначенные представители будут иметь право за счет CSI и при предоставлении уведомления за 15 дней, не чаще, чем один раз в квартал, проводить ревизию таких бухгалтерских книг и отчетов в обычное рабочее время, чтобы проверить произведенные платежи или выполнение обязанностей в других отношениях в рамках настоящего Соглашения. В случае, если такая ревизия выявит недоплату, CGS обязано устранить такую недоплату в пользу CSI в течение 15 дней с момента получения им  письменного уведомления о такой недоплате.

	 	 	 
	
Section 4.04 – Continuing Governmental and Other Authorizations

	 	
Раздел 4.04 - Действительность правительственных и прочих разрешений

	
CGS shall obtain and maintain in force (or, where applicable, renew) all licenses, approvals, permits, certificates, consents, registrations, filings, agreements and other authorizations necessary to carry out the Project and conduct its business (collectively the “Authorizations”).  CGS shall perform and observe all the conditions and restrictions contained in or imposed on CGS or the Project by such Authorizations.

 

	 	
CGS обязано получать и сохранять в силе (или, где это применимо, продлять) все лицензии, согласования, разрешения, сертификаты, согласия, регистрации, заявки, договоры и прочие разрешения, необходимые для осуществления Проекта и ведения своей хозяйственной деятельности (совместно именуемые ниже «Разрешения»). CGS обязано выполнять и соблюдать все условия и ограничения, содержащиеся в таких Разрешениях или наложенные на CGS или на Проект такими Разрешениями.

 

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ARTICLE V – REPRESENTATIONS AND WARRANTIES OF CGS

	 	
СТАТЬЯ V - ЗАВЕРЕНИЯ И ГАРАНТИИ СО СТОРОНЫ CGS

	
CGS represents and warrants as follows:

	 	
CGS дает следующие заверения и гарантии:

	
(a) Corporate Power.  CGS has the corporate power to enter into, and perform all its obligations under this Agreement.

	 	
(а)Корпоративные полномочия. CGS имеет корпоративные полномочия, необходимые для заключения настоящего Соглашения и выполнения всех своих обязательств по нему.

	 	 	 
	
(b) Due Authorization; Enforceability; No Conflict.  Execution and entry into this Agreement has been duly authorized by CGS, and this Agreement, when executed and delivered, will constitute, valid and legally binding obligations of CGS, enforceable in accordance with its terms.  The making of this Agreement and the compliance with the terms hereof:

 

	 	
(b)           Надлежащие разрешения; Исполнимость; Отсутствие конфликтов. Заключение и участие в настоящем Соглашении было должным образом разрешено со стороны CGS, и настоящее Соглашение, после его подписания и вручения, будет составлять действительные и юридически обязывающие обязательства CGS, исполнимые в соответствии с его условиями. Заключение настоящего Соглашения и соблюдение условий настоящего Соглашения:

	 	 	 
	
(1) will not result in violation of the CGS’s Charter, the Subsoil Use Contract, and agreements relating to the Project or any provision contained in any law applicable to CGS, the Subsoil Use Contract or the Project;

	 	
(1)не приведут к нарушению Устава CGS, Контракта на недропользование и договоров, касающихся Проекта, или любого положения, содержащегося в любом законе, применимом к CGS, к Контракту на недропользование или к Проекту;

	 	 	 
	
(2) will not conflict with or result in the breach of any provision of, or require any consent under, or result in the imposition of any lien under, any agreement or instrument to which CGS or the Project is a party or by which CGS or the Project or any of their respective assets are bound; and

 

	 	
(2)           не будут конфликтовать, не приведут к нарушению любого положения, не потребуют согласования, и не приведут к наложению любого залогового удержания согласно условиям любого соглашения или документа, стороной которого является CGS или Проект, или которым CGS или Проект, или любые из их соответствующих активов связаны; а также

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(3) will not constitute a default or an event which, with the giving of notice, the passage of time or the making of any determination (or any combination thereof), would constitute a default under any such agreement or instrument.

 

	 	
(3)           не будет представлять собой неисполнение обязательств или событие, которое после предоставления уведомления, по прошествии времени или после принятия любого определения (или при любой их комбинации), будет представлять собой неисполнение обязательств по любым таким соглашениям или документам.

	 	 	 
	
(c) Governmental Authorizations.  No authorizations from any governmental authority are required for the due execution, delivery or performance by CGS of this Agreement, or the validity or enforceability thereof, or for the carrying out of the Project or the carrying on of the business of the CGS as it is carried on or is contemplated to be carried on.

	 	
(с)Разрешения со стороны государственных органов. Не требуется никаких разрешений от любых государственных органов для надлежащего заключения, вручения или исполнения со стороны CGS настоящего Соглашения, или его действительности или исковой силы, или для осуществления Проекта или ведения CGS хозяйственной деятельности, в том виде, в котором она осуществляется или предполагается.

	 	 	 
	
(d) Interest in the Deposit, the Project and the Subsoil Use Contract.  CGS has legally enforceable rights in and to the Deposit, the Project and, when issued, the Subsoil Use Contract representing a 50% ownership interest in each.  These interests are free from any restrictions or covenants which might have a material adverse effect on the Deposit, the Project or the Subsoil Use Contract and are not subject to any lien or encumbrance.

 

	 	
(d)           Доля участия в Месторождении, Проекте и в Контракте на недропользование. CGS имеет юридически осуществимые права на Месторождение, на Проект и на Контракт на недропользование (после его присуждения), представляющие собой 50% доли участия в каждом из них. Эти доли участия являются свободными от любых ограничений или запретов, которые могли бы оказать существенное негативное воздействие на Месторождение, на Проект или на Контракт на недропользование, и на них не распространяются какие-либо залоги или обременения.

 

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(e) No Default.  Neither CGS nor the Project is in default under any agreement, obligation or duty to which it is a party or by which the Deposit, the Project or the Subsoil Use Contract, when issued, is or would be bound where such default would have a material adverse effect on the Deposit, the Project, the Subsoil Use Contract or CGS’s business, operations or financial condition or the ability of CGS to perform any of its material obligations under this Agreement.

 

	 	
(е)Отсутствие состояния неисполнения обязательств. CGS и Проект не находятся в состоянии неисполнения обязательств по любому соглашению, обязательству или обязанности, по которым они являются стороной или которыми связаны или могут быть связаны Месторождение, Проект или Контракт на недропользование (после его присуждения), и их нарушение может привести к существенному негативному воздействию на Месторождение, на Проект, на Контракт на недропользование или на хозяйственную деятельность CGS, на его операции или финансовое состояние, или на способность CGS выполнять любые существенные обязательства по настоящему Соглашению.

	 	 	 
	
(f) Environmental Compliance.  CGS has conducted its and the Project’s activities and operations in material compliance with the provisions of all applicable laws relating to environmental matters.  There is no known contamination on the Deposit and it is suitable for the Project.

 

	 	
(f)           Соответствие экологическим нормам. CGS проводит свою деятельность, а также деятельность и операции по Проекту в существенном соответствии с положениями всех применимых законов, касающихся охраны окружающей среды. Не имеется известных загрязнений на Месторождении и оно подходит для осуществления Проекта.

	 	 	 
	
(g) Litigation.  Neither CGS nor the Project is engaged in, or, to the best of its knowledge, threatened by, any litigation, arbitration or administrative proceeding, the outcome of which would have a material adverse effect on the Deposit, the Project, the Subsoil Use Contract or CGS’s business, operations or financial condition or the ability of CGS to perform any of its material obligations under this Agreement.

 

	 	
(g)           Судебные разбирательства. CGS и Проект не вовлечены, и, насколько известно CGS, не находятся под угрозой какого-либо судебного процесса, арбитража или административного разбирательства, исход которого будет иметь существенное негативное воздействие на Месторождение, на Проект, на Контракт на недропользование или на хозяйственную деятельность, операции или финансовое состояние CGS, или на способность CGS выполнить любые из его существенных обязательств по настоящему Соглашению.

	 	 	 
	
ARTICLE VI – EVENTS OF DEFAULT

	 	
СТАТЬЯ VI - СОБЫТИЯ НЕИСПОЛНЕНИЯ ОБЯЗАТЕЛЬСТВ

	
Section 6.01 – Events of Default

	 	
Раздел 6.01 - События неисполнения обязательств

	
Each of the following events and occurrences shall constitute an event of default under this Agreement:

	 	
Каждое из нижеописанных событий и явлений составляет событие неисполнения обязательств по настоящему Соглашению:

 

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(a) Payments.  CGS fails to pay when due any Minimum Monthly Payment, the Final Payment, any Participation Interest Payment or any other payment as required by this Agreement.

 

	 	
(а)Платежи. CGS не осуществляет своевременно любой Минимальный ежемесячный платеж, Окончательный платеж, или любую Оплату за долю участия, или любой другой платеж, требуемый по настоящему Соглашению.

	 	 	 
	
(b) Covenants.  CGS fails to perform in a timely manner any of its obligations under this Agreement.

 

	 	
(b)           Договорные обязательства. CGS не выполняет своевременно любое из своих договорных обязательств по настоящему Соглашению.

	 	 	 
	
(c) Representations.  Any representation or warranty made or confirmed by CGS in this Agreement was false or misleading in any material respect when made or repeated.

 

	 	
(с)Заверения. Любые заверения или гарантии, данные или подтвержденные CGS в настоящем Соглашении, были ложными или вводящими в заблуждение в любом существенном отношении, в тот момент, когда они были даны или повторены.

	 	 	 
	
(d) Bankruptcy.  A decree or order of a court is entered against CGS or the Project adjudging CGS or the Project bankrupt or insolvent or ordering the winding up or liquidation of its affairs; or a petition is filed seeking reorganization, administration or liquidation of CGS or the Project; or a receiver, administrator, trustee or similar official is appointed over CGS or the Project or any substantial asset of CGS or the Project; or CGS or the Project institutes proceedings to be adjudicated bankrupt or insolvent; or consents to the institution of bankruptcy proceedings against it; or makes an assignment for the benefit of creditors; or any other event occurs which would have an analogous effect to any of these events.

 

	 	
(d)           Банкротство. В отношении CGS или Проекта издается распоряжение или постановление суда, объявляющее CGS или Проект банкротом или неплатежеспособным лицом, или содержащее указание о его ликвидации или ликвидации его дел; или подано заявление о реорганизации, ликвидации или администрировании CGS или Проекта; или если для CGS или Проекта, или для любого существенного актива CGS или Проекта назначается правопреемник, администратор, опекун или иное официальное лицо; или если CGS или Проект начинает разбирательство для объявления себя банкротом или неплатежеспособным лицом; или дает согласие на начало процедуры банкротства в отношении себя; или совершает переуступку в пользу кредиторов; или происходит любое другое событие, которое будет иметь аналогичное воздействие на любое из этих событий.

	 	 	 
	
(e) Change in Control.  Any change in control of CGS or the Project without the prior written consent of CSI.

 

	 	
(е)Изменение структуры контроля. Любое изменение структуры контроля над CGS или над Проектом без предварительного письменного согласия CSI.

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(f) Material Adverse Effect. Any circumstance or event occurs which, in the reasonable opinion of CSI, is likely to have a material adverse effect on the Deposit, the Project, the Subsoil Use Contract or the business, operations or financial condition of CGS.

 

	 	
(f)           Существенное неблагоприятное воздействие. Имеет место любое обстоятельство или событие, которое, по обоснованному мнению CSI, может иметь существенное неблагоприятное воздействие на Месторождение, на Проект, на Контракт на недропользование или на хозяйственную деятельность, операции или финансовое состояние CGS.

	 	 	 
	
Section 6.02 – Consequences of Default

	 	
Раздел 6.02 - Последствия неисполнения обязательств

	
If an event of default occurs and is continuing, CSI may at its option, by notice to CGS, declare a default.  In the event CSI declares a default:

	 	
Если происходит и продолжается событие неисполнение обязательств, CSI вправе по своему усмотрению объявить о неисполнении обязательств, подав уведомление CGS. В случае, если CSI объявляет о неисполнении обязательств:

	 	 	 
	
(a)  CGS unconditionally agrees to pay a default penalty equal to 18% (eighteen percent) per annum charged monthly to the entire unpaid balance of the Outstanding Amount (the “Default Penalty”.)  Any unpaid Default Penalty shall be added to the Outstanding Amount; and

 

	 	
(a) CGS безусловно соглашается заплатить штраф за неисполнение обязательств в размере 18% (восемнадцать процентов) годовых, начисляемых ежемесячно на весь неоплаченный остаток суммы задолженности (“Штраф за неисполнение обязательств”.) Любой неоплаченный Штраф за неисполнение обязательств добавляется к Сумме задолженности; а также

	 	 	 
	
(b) CSI may declare the entire unpaid balance of the Outstanding Amount and any other payments owed to CSI under this Agreement either:

	 	
(b) CSI вправе объявить весь неоплаченный остаток Суммы задолженности и любые другие платежи, причитающиеся к выплате в пользу CSI по настоящему Соглашению либо:

	 	 	 
	
(1) due and payable on demand; or

	 	
(1) подлежащими уплате по требованию; или

	 	 	 
	
(2) immediately due and payable without any further notice and without presentment, demand or protest of any kind, all of which are hereby expressly waived by CGS.

 

	 	
(2) подлежащими немедленной выплате без предварительного уведомления и без представления, требования или протеста любого рода, от права на любые из которых CGS в прямой форме отказывается.

 

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Declaration of a default, calculation and payment of the Default Penalty, or acceleration as provided in this Section 6.02(b) does not release CGS from its other obligations under this Agreement, and shall not limit CSI from taking such other actions to obtain performance of CGS, including payment of any Minimum Monthly Payments, the Final Payment or any Participation Interest Payments, or any other payments provided by this Agreement.

	 	
Заявление о невыполнении обязательств, исчисление и уплата Штрафа за неисполнение обязательств, а также условие об ускорении выплаты, изложенное в Разделе 6.02(b), не освобождают CGS от его прочих обязательств по настоящему Соглашению и не должны ограничивать иные действия CSI, направленные на обеспечение исполнения CGS своих обязательств, включая оплату любых Минимальных ежемесячных платежей, Окончательного платежа или любой Оплаты за Долю участия, или любых других платежей, предусмотренные настоящим Соглашением.

	 	 	 
	
ARTICLE VII – CONFIDENTIALITY

	 	
СТАТЬЯ VII – КОНФИДЕНЦИАЛЬНОСТЬ

	
Section 7.01 – Confidentiality

	 	
Раздел 7.01 – Конфиденциальность

	
The terms and conditions of this Agreement, the documents containing the information regarding the subject matter of this Agreement, the Parties’ activities and their financial condition, as well as any information related to this Agreement, including any records that contain information about the financial condition of the Parties, shall be recognized as confidential and shall not be disclosed without the prior written consent of all Parties to this Agreement, except that CSI shall not be required to obtain the consent of the other Party in the event CSI determines, in its sole discretion, that it is required under federal or state securities laws to disclose such information publicly or otherwise.

	 	
Условия настоящего Соглашения, документы, содержащие информацию о предмете настоящего Соглашения, деятельности Сторон и их финансовом состоянии, а также любая информация, относящаяся к настоящему Соглашению, в том числе любые записи, которые содержат информацию о финансовом состоянии Сторон, считаются конфиденциальными и не подлежат разглашению без предварительного письменного согласия всех Сторон настоящего Соглашения, за исключением того, что CSI не обязана получать согласие другой Стороны в том случае, если CSI определит, по своему собственному усмотрению, что такое публичное или иное раскрытие информации требуется в соответствии с федеральным законодательством или законами отдельных штатов.

	 	 	 
	
Except as expressly provided in this Section 7.01, the Party that discloses confidential information, shall be responsible for ensuring that every person to whom the confidential information hereunder is disclosed, shall keep the information confidential and shall not disclose or transfer the same to third parties.

	 	
За исключением случаев, прямо оговоренных в настоящем Разделе 7.01, Сторона, которая раскрывает конфиденциальную информацию, несет ответственность за обеспечение того, чтобы каждое лицо, которому была раскрыта конфиденциальная информация по настоящему Соглашению, сохраняло конфиденциальность информации и не разглашало и не передавало ее третьим лицам.

 

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Except as expressly provided in this Section 7.01, the Parties shall take all reasonable measures to protect and preserve the confidential information from unauthorized use, loss, theft, publication, etc.

	 	
За исключением случаев, прямо оговоренных в настоящем Разделе 7.01, Стороны обязаны принимать все разумные меры для защиты и сохранения конфиденциальной информации от несанкционированного использования, потери, кражи, публикации и т.д.

	 	 	 
	
ARTICLE VIII – MISCELLANEOUS

	 	
Статья VIII – ПРОЧИЕ УСЛОВИЯ

	 	 	 
	
Section 8.01 – Dispute Resolution

	 	
Раздел 8.01 - Разрешение споров

	
Any disputes and disagreements that may arise in the course of performance of this Agreement, shall be settled by negotiation between the Parties.  In the event the Parties are unable to settle a dispute through negotiation, the dispute shall be resolved in accordance with the laws of the Republic of Kazakhstan.

	 	
Любые споры и разногласия, которые могут возникнуть в ходе исполнения настоящего Договора, разрешаются путем переговоров между Сторонами. В случае, если Стороны не могут разрешить спор путем переговоров, спор должен быть разрешен в соответствии с законодательством Республики Казахстан.

	 	 	 
	
Section 8.02 – Assignment and Transfer

	 	
Раздел 7.02 - Переуступка и передача

	
CGS may not sell, assign or transfer to any person or entity any of its rights hereunder or any of its interest in the Subsoil Use Contract, the Project or the Deposit, or delegate any of its duties hereunder, in whole or in part, without the prior written consent of CSI.

	 	
CGS не вправе продать, передать или переуступить любому лицу или организации никакие свои интересы в Контракте на недропользование, в Проекте или в Месторождении, или перепоручить свои обязанности по настоящему Соглашению, в целом или в части, без предварительного письменного согласия CSI.

	 	 	 
	
Section 8.03 – Amendments

	 	
Раздел 8.03 – Поправки

	
This Agreement may be amended and supplemented under an agreement of the Parties. All amendments and additions to this Agreement must be in writing and signed by the Parties.

	 	
Настоящее Соглашение может быть изменено и дополнено по соглашению сторон. Все изменения и дополнения к настоящему Соглашению должны быть в письменной форме и должны быть подписаны Сторонами.

	 	 	 
	
Section 8.04 – Prevailing Language

	 	
Раздел 8.04 – Превалирующий язык

	
This Agreement is made in two (2) originals in the Russian and in the English languages having equal force and effect, one original for each Party.  In the event of any discrepancies between the versions of this Agreement in the English and in the Russian languages, the English text shall prevail.

	 	
Настоящий Договор составлен в 2 (двух) экземплярах на русском и на английском языках, имеющих равную юридическую силу, по одному экземпляру для каждой из Сторон. В случае любых расхождений между версиями настоящего Соглашения на английском языке и на русском языке, текст на английском языке имеет преимущественную силу.

 

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Section 8.05 – Termination

	 	
Раздел 8.05 - Прекращение действия

	
Provided that payment in full of the Outstanding Amount is made, this Agreement shall terminate on the earlier of seven years from the date of commencement of production following a commercial discovery at the Deposit, or the  conversion, exchange or retirement of the Participation Interest.

	 	
При условии, что была осуществлена полная оплата Суммы задолженности, настоящее Соглашение прекращает свое действие при наступлении первого из перечисленных ниже событий: через семь лет с даты начала добычи после коммерческого обнаружения на Месторождении, или в случае преобразования, обмена или изъятия Доли участия.

	 	 	 
	
Section 8.06 – Entire Agreement

	 	
Раздел 8.06 – Полное соглашение

	
This Agreement constitutes the entire agreement between the Parties with respect to the subject matter hereof and constitutes and supersedes all prior agreements, representations and understandings of the Parties, written or oral, with regard to the subject matter hereof.

	 	
Настоящее Соглашение представляет собой полное соглашение между Сторонами в отношении предмета настоящего Соглашения и заменяет собой все предыдущие соглашения, заявления и договоренности Сторон, письменные или устные, в отношении предмета Соглашения.

	 	 	 
	
Signatures of the Parties:

	 	
Подписи Сторон:

	
On behalf of CGS:

	 	
От имени CGS:

	
Caspian Geo-Consulting Services LLP

	 	
ТОО Каспиан Гео-Консалтинг Сервисэс («Caspian Geo-Consulting Services»)

	
 

 

By: /s/ N.N. Khamzin

 N. N. Khamzin, Director / Директор Н. Н. Хамзин

 

 

	
On behalf of CSI:

	 	
Oт имени CSI:

	
Caspian Services, Inc.

	 	
Корпорация «Каспиан Сервисез»

	
 

 

By: /s/ A.S. Kotov

A. S. Kotov, President / Президент А. С. Котов

 

 

Page/Стр. 16 of/из 16Exhibit 10.37

 

INVESTMENT AGREEMENT

 

THIS INVESTMENT AGREEMENT (the “Agreement”)
is entered into as of October 27, 2015, by and among Crossroads Systems, Inc., a Delaware corporation (the “Company”),
TQ Zeta LLC a Delaware limited liability company (“TQ Zeta”) and the investors listed on the signature
pages hereto.

 

RECITALS

 

WHEREAS, the Company desires funding for
its Patent Litigation (as defined below); and

 

WHEREAS, the Investors (as defined below)
are willing to provide such funding in exchange for consideration.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the
mutual promises, agreements, representations, warranties and covenants contained herein, the parties hereto agree as follows:

 

1.            Definitions.

 

1.1            “AAA”
has the meaning set forth in Section 8.7(b).

 

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

 

1.3            “Allocation
Percentage” means, with respect to an Investor, the percentage assigned to that Investor on Schedule A in
the column entitled “Allocation Percentage.”

 

1.4            “Allocable
Portion” means the amount of any Specified Transaction Proceeds payable to an Investor following a Specified Transaction
described in Section 2.5(b).

 

1.5            “Allocation
Schedule” has the meaning set forth in Section 2.5(b)(ii).

 

1.6            “Arbitrators”
has the meaning set forth in Section 8.7(b).

 

1.7            “Audit
Dispute Notice” has the meaning set forth in Section 5.5.

 

1.8            “Audit
Statement” has the meaning set forth in Section 5.5.

 

1.9            “Business
Day” means any day except a Saturday, a Sunday or any other day on which commercial banks are not required by law
to be open in New York, New York.

 

    	[**] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

     

    

 

1.10            “Closing”
has the meaning set forth in Section 2.6(b).

 

1.11            “Closing
Date” has the meaning set forth in Section 2.6(b).

 

1.12            “Commercial
Rules” has the meaning set forth in Section 8.7(b).

 

1.13            “Company
SEC Documents” has the meaning set forth in Section 3.9.

 

1.14            “Dispute
Notice” has the meaning set forth in Section 2.5(b)(iii).

 

1.15            “Early
Termination Election” has the meaning set forth in Section 2.4(b).

 

1.16            “Election
Notice” has the meaning set forth in Section 2.4(b).

 

1.17            “Encumbrances”
means any mortgages, pledges, liens, charges, hypothecations, right of set-off, covenants, non-assertions, immunities, releases,
rights of first refusal, options, claims, security interests or other encumbrances and restrictions having a similar or analogous
effect.

 

1.18            “Excluded
Payments” means (i) all payments due to the Company under the Amended Settlement and License Agreement between the
Company and Dot Hill Systems Corp. or its successor having an effective date of June 27, 2006 (“Dot Hill License Agreement”),
including any unpaid quarterly payments that Dot Hill Systems Corp. or its successor has withheld or will withhold from the Company
based on the pending IPR proceedings against the Company, but excluding any payments due to the Company under the Dot Hill License
Agreement that are the subject of or related to the action filed by the Company in the United States District Court for the Western
District of Texas in Austin, Texas on September 11, 2013 styled Crossroads Systems, Inc. v. Dot Hill Systems Corp., Civil Action
No. 1:13-CV-800-SS, and (ii) revenue from Patent licenses with third parties in effect prior to the date of this Agreement, which
licenses are listed on Schedule 1.18, but only to the extent that such revenue does not exceed $10,000, in the aggregate,
per calendar quarter.

 

1.19            “Expenses
Cash Amount” has the meaning set forth in Section 2.2(a).

 

1.20            “IPR”
means an inter partes review proceeding, a post-grant proceeding conducted by the Patent Trial and Appeal Board to review
one or more claims of an issued patent, in which the petitioner attempts to challenge the validity of a patent on certain defined
grounds.

 

1.21            “IPR
Termination Date” has the meaning set forth in Section 2.4(b).

 

1.22            “IPR
Termination Notice” has the meaning set forth in Section 2.4(b).

 

1.23            “Investment
Amount” has the meaning set forth in Section 2.1.

 

    	[**] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
 
2 

     

    

 

1.24            “Investor(s)”
means TQ Zeta and the other investors listed on the signature pages hereto, along with their respective successors and assigns.

 

1.25            “Litigation
Defendant(s)” means, collectively, Cisco Systems, Inc., Dot Hill Systems Corp. or its successor, NetApp, Inc., Oracle
Corporation and Quantum Corporation, any other Person added as a party to the Patent Litigation, any Affiliates of any of the foregoing
and their respective successors and assigns.

 

1.26            “Net
Cash Proceeds” means (i) any cash or other property (excluding licenses or assignments of patents to the Company
or similar such arrangements in connection with settlements of the Patent Litigation, but including any cash subsequently derived
therefrom) received by the Company from the licensing of any Patent, settlement or judicial awards of or arising from the Patent
Litigation or any other monetization of the Patents (except any Excluded Payments), less legal contingency fees and related legal
expenses incurred by Company’s legal counsel and related to the Patent Litigation or any sale or other monetization of the
Patents, plus (ii) 80% of any Specified Transaction Proceeds described in the first sentence of Section 2.5(a), plus (iii)
the Allocable Portion from a Specified Transaction consummated following the final resolution of the Patent Litigation as determined
by Section 2.5.

 

1.27            “Patent
Litigation” means, collectively, (i) the action filed by the Company in the United States District Court for the
Western District of Texas in Austin, Texas on September 11, 2013 styled Crossroads Systems, Inc. v. Dot Hill Systems Corp., Civil
Action No. 1:13-CV-800-SS; (ii) the action filed by the Company in the United States District Court for the Western District of
Texas in Austin, Texas on October 7, 2013 styled Crossroads Systems, Inc. v. Oracle Corporation; Civil Action No. 1:13-cv-0895-SS;
(iii) the action filed by the Company in the United States District Court for the Western District of Texas in Austin, Texas on
February 18, 2014 styled Crossroads Systems, Inc. v. Cisco Systems, Inc.; Civil Action No. 1:14-cv-00148-SS; (iv) the action filed
by the Company in the United States District Court for the Western District of Texas in Austin, Texas on February 18, 2014 styled
Crossroads Systems, Inc. v. NetApp, Inc.; Civil Action No. 1:14-cv-00149-SS; (v) the action filed by the Company in the United
States District Court for the Western District of Texas in Austin, Texas on February 18, 2014 styled Crossroads Systems, Inc. v.
Quantum Corporation; Civil Action No. 1:14-cv-00150-SS; (vi) any other litigation in connection with the monetization of the Patents
that is ongoing as of the date hereof or that may commence hereafter; and (vii) any amendments, refilings, substitute actions or
other successor proceedings to the foregoing.

 

1.28            “Patents”
means the patents and patent applications described on Exhibit A attached hereto and any patents and patent applications
that claim priority to such patents and patent applications, including any divisions, continuations, renewals, reissues, extensions
and continuations-in-part of the same, and including any patent rights associated with the foregoing.

 

1.29            “Percentage”
has the meaning set forth in Section 2.3.

 

1.30            “Percentage
Payment” has the meaning set forth in Section 2.3.

 

    	[**] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
 
3 

     

    

 

1.31            “Permitted
Expenses” means the expenses set forth on Exhibit C hereto.

 

1.32            “Person”
means any natural person, firm, partnership, association, corporation, company, trust, business trust, governmental entity or other
entity.

 

1.33            “Qualifying
Financial Institution” has the meaning set forth in Section 2.2(a).

 

1.34            “Securities
Act” means the Securities Act of 1933, as amended.

 

1.35            “Segregated
Account” has the meaning set forth in Section 2.2(a).

 

1.36            “Specified
Transaction” means (i) an acquisition by any Litigation Defendant or its Affiliates of more than 50% of the then
outstanding voting power of the Company; (ii) the merger, consolidation or other business combination transaction of the Company
with any Litigation Defendant or any of its Affiliates pursuant to which the stockholders of the Company immediately prior to such
transaction own less than a majority of the aggregate voting power of the Company or the successor entity of such transaction,
or (iii) sale or transfer of any of the Patents or all or any substantial portion of the Company’s assets to any Litigation
Defendant or any of its Affiliates.

 

1.37            “Specified
Transaction Proceeds” means the consideration paid or payable, as well as the value of any liabilities of the Company
assumed, by any Litigation Defendant to the Company or its stockholders in connection with a Specified Transaction.

 

1.38            “Taxes”
means any non-U.S., U.S. federal, state, local, municipal, or other governmental taxes, duties, levies, fees, excises, or tariffs,
arising as a result of or in connection with any amounts of cash or other property received or paid under this Agreement.

 

1.32            “TQ Zeta”
has the meaning set forth in the introductory paragraph.

 

2.            Litigation
Funding.

 

2.1            Investment
Amount. Subject to the terms and conditions herein, the Investors shall make a payment to the Company of $10,000,000 (the “Investment
Amount”) in the respective amounts set forth on Schedule A hereto on the Closing Date by wire transfer of
immediately available funds in consideration for a portion of the Net Cash Proceeds and the other terms and conditions as provided
herein.

 

2.2            Application
of Investment Amount. The Investment Amount paid by the Investors to the Company pursuant to Section 2.1 above shall
be applied as follows:

 

		(a)	No later than ten (10) days following the Closing, the Company shall provide the Investors with evidence that $7,030,000 (the
“Expenses Cash Amount”) has been deposited into a separate account (the “Segregated Account”)
established and maintained by the Company at a financial institution rated “A” or higher by a nationally recognized
credit rating agency (a “Qualifying Financial Institution”). The Company may move the Segregated Account
to another Qualifying Financial Institution upon five (5) Business Days’ advance written notice to the Investors. The Segregated
Account shall have no other funds in it other than the Expenses Cash Amount and any withdrawals from the Segregated Account shall
be made solely for the purpose of paying any Permitted Expenses.

 

    	[**] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
 
4 

     

    

 

		(b)	The remainder of the Investment Amount shall be deposited into the Company’s corporate account and used by the Company
for (i) within ten (10) days following the Closing, the payment of the existing loan balance owed to CF DB EZ LLC (as assignee
of Fortress Credit Co. LLC) at Closing or promptly thereafter, and (ii) working capital and general corporate purposes.

 

2.3            Share
of Net Cash Proceeds. The Company agrees to pay to the Investors a percentage of the Net Cash Proceeds equal to the aggregate
amount of the Net Cash Proceeds multiplied by the percentage under the heading Investors (the “Percentage”)
set forth on Exhibit B hereto across from such aggregate amount (the “Percentage Payment”). Such
payment shall be made as provided in Section 2.4 and shall be allocated among the Investors according to their respective
Allocation Percentages. In determining the correct Percentage to apply, in the event of more than one receipt of Net Cash Proceeds,
any receipt of Net Cash Proceeds shall be added to all prior receipts to determine the proper Percentage, and then such Percentage
shall be multiplied by the most recent Net Cash Proceeds. Solely by way of example, if in April 2016 the Company receives Net Cash
Proceeds of $40 million, and then in August 2016 the Company receives Net Cash Proceeds of an additional $70 million, then following
the receipt of the April 2016 Net Cash Proceeds the Company would pay an aggregate of $18.4 million ($20,000,000 x 52% + $20,000,000
x 40%) to the Investors, and then following the receipt of the August 2016 Net Cash Proceeds the Company would pay in addition
to the April 2016 payment, an aggregate of $25.2 million ($60,000,000 x 40% + $10,000,000 x 12%).

 

2.4            Payments
to Investors. The Company shall make payments to the Investors in accordance with their respective Allocation Percentages upon
the occurrence of any of the following events:

 

		(a)	Receipt of Net Cash Proceeds. Promptly following receipt by the Company of any Net Cash Proceeds, the Company shall
notify and promptly pay to the Investors their Percentage Payment with respect to such Net Cash Proceeds, allocated to each Investor
in accordance with its Allocation Percentage. All cash payments pursuant to this Section 2.4(a) shall be made by wire transfer
of immediately available funds within five (5) Business Days of receipt by the Company of the Net Cash Proceeds pursuant to wire
instructions provided by each Investor to the Company in writing. Any receipt by the Company of property included as part of the
Net Cash Proceeds shall be distributed to the Investors pursuant to the provisions hereof in kind as soon as practicable.

 

    	[**] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
 
5 

     

    

 

		(b)	IPR Termination. In the event that, by the latest termination date of the Company’s current IPR proceedings (the
“IPR Termination Date”), there is not at least one lawsuit with assertable patent claims remaining, the
Company shall promptly provide written notice to the Investors of such event (the “IPR Termination Notice”).
Following the IPR Termination Date, the Company shall cease to make any withdrawals from the Segregated Account pending a decision
by each Investor on whether it chooses to have its Allocation Percentage of the remaining funds in the Segregated Account returned
to it (each, an “Early Termination Election”). To make its Early Termination Election, an Investor must
deliver a notice as provided herein. If an Investor does not deliver a notice as provided herein, then the Early Termination Election
is deemed to not be made by such Investor. Each Investor shall have fourteen (14) days following the delivery by the Company of
the IPR Termination Notice to make its Early Termination Election by delivery of a notice by such Investor to the Company (the
“Election Notice”). Upon the Company’s receipt of an Investor’s Election Notice, the Company
shall promptly return any portion of the Expenses Cash Amount remaining in the Segregated Account to such Investor in accordance
with its Allocation Percentage, but in any event within five (5) Business Days from the date of receipt of the Investor’s
Election Notice. The Company shall have no further obligation to return any portions of the Investment Amount used to that date.
If each Investor does not deliver an Election Notice within such fourteen (14) day period, or earlier notify the Company in writing
that they do not intend to make the Early Termination Election, then any remaining portion of the Expenses Cash Amount shall remain
in the Segregated Account and continue to be available to be used by the Company for Permitted Expenses as provided herein. If
an Investor does not deliver the Election Notice to the Company within the fourteen (14) day period, the Investors acknowledge
and hereby agree that such Investor shall have waived its rights to make an Early Termination Election. Upon payment to the electing
Investors in accordance with their respective Allocation Percentages of the remaining funds in the Segregated Account following
a valid Early Termination Election, then (i) Section 5 (including Sections 5.1, 5.2, 5.3, 5.4,
5.5 and 5.6) hereof shall terminate and be of no further force and effect and (ii) the provisions for payment of
Net Cash Proceeds in Sections 2.3 and 2.4(a) and following a Specified Transaction as set forth in Section 2.5 hereof shall
terminate and be of no further force and effect, in each case with respect to such Investor(s) providing a valid Early Termination
Election. In the event of an Early Termination Election by one Investor, then future payments under this Agreement of Net Cash
Proceeds that would have been paid to such electing Investor if the Early Termination Election had not been made shall be retained
by the Company.

 

2.5            Specified
Transactions. 

 

		(a)	If, at any time prior to or simultaneously with the final resolution of the Patent Litigation and payment of the Percentage
Payment to the Investors, the Company proposes to enter or enters into a Specified Transaction, the Company agrees that it shall
not enter into such Specified Transaction unless provision is made to secure that 80% of the Specified Transaction Proceeds will
constitute Net Cash Proceeds and be paid to the Investors pursuant to this Agreement. The other 20% of the Specified Transaction
Proceeds will be exempt from inclusion as Net Cash Proceeds.

 

    	[**] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
 
6 

     

    

 

		(b)	If, at any time after the final resolution of the Patent Litigation and payment of the Percentage Payment to the Investors,
the Company proposes to enter into or enters into a Specified Transaction, the Company agrees that the Allocable Portion of the
Specified Transaction Proceeds shall be treated as Net Cash Proceeds and paid to the Investors pursuant to this Agreement.

 

		(i)	Determination of Allocable Portion. To determine the Allocable Portion amount, the Company shall consider the portion
of the Specified Transaction Proceeds directly attributable to the monetization of the Patents. Any other amounts of the Specified
Transaction Proceeds not so directly attributable, such as relating to the Company’s other assets, operations, businesses,
good will, exchange listing, public entity status, or otherwise, shall not be included in the Allocable Portion.

 

		(ii)	No less than ten (10) days prior to the anticipated closing date of the Specified Transaction, the Company shall deliver to
the Investors the Company’s good faith estimate of the Allocable Portion of the Specified Transaction Proceeds, which the
Company shall update and deliver to the Investors within five (5) days following the closing of the transactions contemplated by
the Specified Transaction (the “Allocation Statement”).

 

		(iii)	The Allocation Statement shall be final and binding on
                                         the parties unless either Investor delivers to the Company a written notice of disagreement
                                         with the Allocation Statement within ten (10) days following the receipt thereof. In
                                         the event that either Investor disputes any portion of the Allocation Statement, such
                                         Investor shall provide notice describing the nature of any such disagreement in reasonable
                                         detail, identifying the specific items as to which the Investor disagrees and such notice
                                         shall provide reasonable supporting documentation (the “Dispute Notice”).
                                         Within five (5) days following the Company’s receipt of such Dispute Notice, the
                                         Company shall provide the Investors with reasonable access to the Company’s books
                                         and records to the extent necessary to review the matters and information used to prepare
                                         and to support the Allocation Statement, all in a manner not unreasonably interfering
                                         with the business of the Company. Thereafter, the Investors and the Company shall attempt
                                         to resolve all such matters identified in the Dispute Notice. If the Investors and the
                                         Company are unable to resolve all such disagreements within ten (10) days after the receipt
                                         by the Company of the Dispute Notice (or such longer period as may be agreed by the Company
                                         and the Investors), then the remaining disputed matters shall be promptly submitted to
                                         the Arbitrators for binding resolution. The Arbitrators will consider only those items
                                         and amounts set forth in the Allocation Statement as to which the Company and the Investors
                                         have disagreed, shall resolve such disagreements in accordance with the terms and provisions
                                         of this Agreement and shall not resolve any particular amount in dispute to be an amount
                                         less than the lowest amount claimed by one of the parties or an amount higher than the
                                         highest amount claimed by one of the parties. The Arbitrators shall issue a written report
                                         containing a final Allocation Statement setting forth their determination of the Allocable
                                         Portion, which determination shall be final and binding upon the Company and the Investors.
                                         The fees and expenses of the Arbitrators incurred in connection with the determination
                                         of the disputed items shall be paid by the Investors and by the Company based on the
                                         relative amounts of their positions as compared to the final determination of the Arbitrators;1
                                         provided, however, that any fees incurred by the Company shall not be deducted
                                         from the Specified Transaction Proceeds. The Company and the Investors shall cooperate
                                         fully with the Arbitrators and respond on a timely basis to all requests for information
                                         or access to documents or personnel made by the Arbitrators, all with the intent to fairly
                                         and in good faith resolve all disputes relating to the Allocation Statement as promptly
                                         as reasonably practicable.

 

 

 

1 Solely by way of example, if there occurs a Specified
Transaction valued at $100 million, and the Company provides in the Allocation Statement that $40 million of the proceeds are
the Allocable Portion to be included as Net Cash Proceeds and the Investors believe the Allocable Portion is $60 million, and
the Arbitrators determine that the Allocable Portion is $45 million, then the Company would pay 25% (5/(60 – 40)) of the
fees and expenses and the Investors would pay 75% (15/(60 – 40)) of the fees and expenses.

 

    	[**] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
 
7 

     

    

 

		(iv)	Unless otherwise provided herein, all disputes under this Section 2.5(b) shall be settled by arbitration pursuant to
Section 8.7(b).

 

2.6            The
Closing.

 

		(a)	The Investors’ obligations under this Agreement shall not be effective unless and until, on the Closing Date, the Investors
have received an officer’s certificate executed by the President and Chief Executive Officer of the Company, dated as of
the Closing Date, certifying that the representations and warranties of the Company contained in Section 3 of this Agreement
are true and accurate in all material respects on and as of the Closing Date.

 

		(b)	The closing of the transactions contemplated by this Agreement (the “Closing”) shall take place at
the offices of Olshan Frome Wolosky LLP upon the satisfaction or waiver of all of the conditions set forth in this Agreement (including
Section 2.6(a)) on such date as is mutually agreeable to the parties (the “Closing Date”).

 

    	[**] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
 
8 

     

    

 

3.            Representations
and Warranties of the Company. The Company represents and warrants to the Investors as follows as of the date hereof:

 

3.1            Organization,
Authority and Enforceability. The Company is a corporation duly incorporated, validly existing and in good standing under the
laws of the State of Delaware. The Company has all requisite power and authority to enter into this Agreement and carry out the
transactions contemplated hereby. This Agreement has been duly and validly executed by the Company, and constitutes the valid and
binding agreement of the Company enforceable against the Company in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the rights of creditors and general principles of equity.
No other corporate proceedings on the part of the Company are necessary to authorize the execution and performance by the Company
of the transactions contemplated herein.

 

3.2            No
Conflict. The execution and delivery of this Agreement by the Company does not and the consummation of the transactions contemplated
hereby by the Company will not (i) violate any provision of the certificate of incorporation, bylaws or similar governance documents
of or applicable to the Company, (ii) result in a breach (or in any event which, with notice or lapse of time or both, would constitute
a breach) of any term or provision of, or constitute a default under, any agreement or arrangement to which the Company or any
of its Affiliates is a party or any agreement or arrangement concerning the Patents, (iii) result in the creation of any Encumbrance
on the Patents, or (iv) violate any applicable law or any judgment, decree, order, regulation or rule of any governmental authority
by which the Company (or any of its subsidiaries, if applicable) is bound or subject.

 

3.3            Consents.
No consent, waiver, approval, order or authorization of, or registration, declaration or filing with, or notice to any governmental
authority is required by, or with respect to, the Company or the Patents in connection with the execution and delivery of this
Agreement or the consummation of the transactions contemplated hereby, except for filings and disclosures required under any applicable
securities laws. The Company has received the approval of the holders of a majority in interest of the Company’s 5.0% Series
F Convertible Preferred Stock outstanding to enter into this Agreement and carry out the transactions contemplated hereby.

 

3.4            Title
and Contest. Except for the obligations to CF DB EZ LLC (as assignee of Fortress Credit Co. LLC) which shall be eliminated
upon repayment of the current loan balance as set forth in Section 2.2(b) herein, the Company owns all right, title, and
interest to the Patents, free and clear of all Encumbrances and there are neither existing contracts, agreements, options, commitments,
or rights with, to, or in any person to assign, acquire or pledge any of the same, including, without limitation, all right, title,
and interest to sue for infringement of the Patents and seek past and future damages from a third party. The Company has obtained
and properly recorded previously executed assignments, if any, for the Patents as necessary to fully perfect its rights and title
therein in accordance with governing law and regulations in each respective jurisdiction.

 

    	[**] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
 
9 

     

    

 

3.5            Litigations
and Proceedings. Except as set forth on Schedule 3.5, other than the pending Patent Litigation there are no actions,
suits, investigations, claims, or proceedings threatened, pending, or in progress relating in any way to the Company or the Patents.
The Company has not received any notice and is not otherwise aware of any claim of a right or interest of any third party, the
effect of which if determined adversely, is or would be to reduce, impair or otherwise materially and prejudicially affect the
Patent Litigation. The Company is not in default with respect to any judgment, decree, injunction or order of any court, administrative
agency or other instrumentality.

 

3.6            Validity
and Enforceability. None of the Patents has ever been found invalid, unpatentable, or unenforceable for any reason in any final
administrative, arbitration, judicial or other proceeding.

 

3.7            Fees.
All maintenance fees, annuities, and the like due or payable on the Patents have been timely paid on the Patents being enforced
in the Patent Litigation.

 

3.8            No
Impairment. Except for the obligations to CF DB EZ LLC (as assignee of Fortress Credit Co. LLC) which shall be eliminated upon
repayment of the current loan balance as set forth in Section 2.2(b) herein, the Company has not taken any action (including
executing documents) or failed to take any action, which as a result would give any person or entity other than Investors an interest
in the Patents, Patent Litigation or Net Cash Proceeds.

 

3.9            SEC
Reports. From January 1, 2015 through the date of this Agreement, the Company has filed or furnished all forms, documents and
reports required to be filed or furnished prior to the date hereof by it with the Securities and Exchange Commission (such forms,
documents and reports, the “Company SEC Documents”). As of their respective dates, or, if amended, as
of the date of (and giving effect to) the last such amendment made prior to the date hereof, the Company SEC Documents complied
in all material respects with the requirements of the Sarbanes-Oxley Act, the Securities Act and the Securities Exchange Act of
1934, as the case may be, and the applicable rules and regulations promulgated thereunder, and none of the Company SEC Documents
contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they were made, not misleading. Crossroads acknowledges
and agrees that the representations and warranties in this Section 3 shall not be affected, diminished or deemed qualified
by reason of any statement or information contained in the Company SEC Documents.

 

3.10            Counsel.
The Company has consulted independent legal counsel regarding the use of third-party investments in connection with the Patents
and has determined that this Agreement is in compliance with all applicable laws and regulations.

 

4.            Representations
and Warranties of Investors. Each Investor, severally and not jointly, represents and warrants to the Company as follows as
of the date hereof:

 

    	[**] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
 
10 

     

    

 

4.1            Authority;
Enforceability. Such Investor has the requisite power to enter into this Agreement and to perform its obligations hereunder.
This Agreement has been duly and validly executed by such Investor, and constitutes the valid and binding agreement of such Investor
enforceable against such Investor in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium
or other similar laws affecting the rights of creditors. No other proceedings are necessary to authorize the execution of this
Agreement by such Investor or the performance by such Investor of its obligations hereunder.

 

4.2            No
Conflicts. The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated
hereby will not result in a breach of any provision of the organizational documents of such Investor.

 

4.3            No
Broker. Such Investor has not engaged any corporation, firm or other entity that is entitled to any fee or commission as a
finder or a broker in connection with the negotiation of this Agreement or the consummation of the transactions contemplated hereby.
Such Investor shall be responsible for all liabilities and claims (including costs and expenses of defending against same) arising
in connection with any claim by a finder or broker that it acted on behalf of such Investor in connection with the transactions
contemplated hereby.

 

4.4            Investment
Representations.

 

		(a)	Such Investor has received all information that it considers necessary or appropriate for deciding whether to invest in the
Company. Such Investor and/or his advisors, who are not affiliated with and not compensated directly or indirectly by the Company
or an Affiliate thereof, have such knowledge and experience in business and financial matters as will enable them to utilize the
information which they have received in connection with the Company and its business to evaluate the merits and risks of an investment,
to make an informed investment decision and to protect such Investor’s own interests in connection with the investment of
the Investment Amount.

 

		(b)	Such Investor understands that the investment of the Investment Amount is a speculative investment that involves a substantial
degree of risk of loss of such Investor’s entire investment in the Company, and the Investor understands and is fully cognizant
of the risk factors related to the investment of the Investment Amount.

 

		(c)	Such Investor understands that any forecasts or predictions as to the Company’s performance are based on estimates, assumptions
and forecasts which, at the time when made, the Company believed to be reasonable but which may prove to be materially incorrect,
and no assurance is given that actual results will correspond with the results contemplated by the various forecasts.

 

		(d)	Such Investor is able to bear the economic risk of this investment and, without limiting the generality of the foregoing, is
able to hold this investment for an indefinite period of time. Such Investor has adequate means to provide for the Investor’s
current needs and personal contingencies and has a sufficient net worth to sustain the loss of the Investor’s entire investment
in the Company.

 

    	[**] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
 
11 

     

    

 

		(e)	Such Investor has had an opportunity to ask questions of the Company and anyone acting on its behalf and to receive answers
concerning the terms of this Agreement, as well as about the Company and its business generally, and to obtain any additional information
which the Company possesses or can acquire without unreasonable effort or expense, that is necessary to verify the accuracy of
the information contained in this Agreement.

 

		(f)	Such Investor is an “accredited investor” as that term is defined in Rule 501 under Regulation D promulgated under
the Securities Act.

 

		(g)	If an entity, such Investor represents and warrants the following: (1) the holders of equity or other beneficial interests
in the Investor are not able to decide individually whether to participate, or the extent of their participation in Investor’s
investment in the Company and (2) no persons other than the Investor will have a beneficial interest in the Percentage Payment
to be received hereunder (other than as a shareholder, partner or other beneficial owner of an equity interest in the Investor).
Such Investor agrees that at all times prior to ceasing to be an investor in the Company, the Investor will notify the Company
of any change that would make the representations set forth in the prior sentence inaccurate or untrue or any change in the information
provided to the Company by the Investor.

 

5.            Additional
Agreements of the Parties.

 

5.1            Conduct
of the Patent Litigation; Settlement.

 

		(a)	The Company shall use its commercially reasonable efforts to (i) monetize the Patents (including to prosecute the Patent Litigation
to a final and non-appealable judgment or to a final, definitive settlement) as promptly as practicable and (ii) collect and enforce
any such settlement or judgment. The Investors are not and do not by virtue of entering into this Agreement become, a party to
the Patent Litigation. The parties hereto acknowledge and agree that the Company shall have the right, in its sole discretion,
to determine whether to settle, resolve or abandon the Patent Litigation, to determine the terms and conditions of any such settlement,
resolution or abandonment and to determine which parties to pursue in the Patent Litigation.

 

		(b)	The Company shall comply with all laws and regulations in all material respects if the failure to do so could materially impair
the Patent Litigation or the monetization thereof.

 

    	[**] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
 
12 

     

    

 

5.2            Additional
Covenants of the Company. During the term of this Agreement the Company shall:

 

		(a)	Not grant an Encumbrance over or affecting the Patents;

 

		(b)	Not enter into any financing that subordinates, dilutes or modifies the Investors’ receipt of their Percentage Payment
as provided herein;

 

		(c)	Subject to Section 5.4, not grant any person with the power to direct the monetization of the Patents or the Patent Litigation,
whether by contract or other similar means;

 

		(d)	Use its best efforts to do all that is necessary to remain solvent and carry on its business;

 

		(e)	Cause all patent maintenance fees and expenses necessary to maintain the Patents in good standing to be timely paid; and

 

		(f)	If requested by an Investor, promptly identify to such Investor information in the Company SEC Documents that the Company believes
is material to the Patents and Patent Litigation.

 

5.3            Reports.
The Company will provide TQ Zeta a report indicating any amounts paid during a calendar month out of the Investment Amount and
the remaining balance of the Expenses Cash Amount and including a copy of the account statement for the Segregated Account, in
each case within thirty (30) days following the close of each calendar month. TQ Zeta agrees that all non-public information disclosed
to such Investor pursuant to this Section 5.3 shall be deemed “Confidential Information” pursuant
to Section 8.8 and, accordingly, shall not be divulged to any third party except as provided therein. Additionally, the
Company will provide any other Investor with the same information provided to TQ Zeta if requested by such Investor.

 

5.4            Disposition
of Patents. The parties acknowledge and agree that the Company may sell, assign or license any of the Patents. Any such proceeds
therefrom shall be Net Cash Proceeds.

 

5.5            Right
to Audit. The Company shall maintain complete and accurate records of the expenses charged to the Company with respect to the
Net Cash Proceeds and Specified Transaction Proceeds. During the term of this Agreement and for a period of three (3) years thereafter,
upon reasonable notice to the Company, each Investor shall be provided access for auditing purposes and to determine the Company’s
compliance with this Agreement and activities contemplated hereunder. Such audits shall be performed by the Investor or its designee
and there shall be no charge to the Investor from the Company. In the event that any audit determines that the Company has failed
to pay any amount due to an Investor hereunder then the Investor shall deliver to the Company a statement of the amount due to
the Investors within twenty (20) Business Days following the audit determination (the “Audit Statement”).
The Audit Statement shall be final and binding on the Company unless the Company delivers to the Investors an audit dispute notice
(the “Audit Dispute Notice”) within ten (10) Business Days following the receipt thereof. Within five
(5) Business Days following the Investors’ receipt of such Audit Dispute Notice, the Investors shall provide the Company
with reasonable access to the information used to prepare and to support the Audit Statement, all in a manner not unreasonably
interfering with the business of each Investor. Thereafter, the Investors and the Company shall attempt to resolve all such matters
identified in the Audit Dispute Notice. If the Investors and the Company are unable to resolve all such disagreements within ten
(10) Business Days after the receipt by the Investors of the Audit Dispute Notice (or such longer period as may be agreed by the
Company and the Investors), then the remaining disputed matters shall be promptly submitted to the Arbitrators for binding resolution.
The Arbitrators will consider only those items and amounts set forth in the Audit Statement as to which the Company and the Investors
have disagreed, shall resolve such disagreements in accordance with the terms and provisions of this Agreement and shall not resolve
any particular amount in dispute to be an amount less than the lowest amount claimed by one of the parties or an amount higher
than the highest amount claimed by one of the parties. The Arbitrators shall issue a written report containing a final Audit Statement
setting forth their determination of the amount due to the Investors, which determination shall be final and binding upon the Company
and the Investors. The fees and expenses of the Arbitrators incurred in connection with the determination of the disputed items
shall be paid by the Investors and by the Company based on the relative success of their positions as compared to the final determination
of the Arbitrators; provided, however, that any fees incurred by the Company shall not be deducted from the Net Cash Proceeds.
The Company and the Investors shall cooperate fully with the Arbitrators and respond on a timely basis to all requests for information
or access to documents or personnel made by the Arbitrators, all with the intent to fairly and in good faith resolve all disputes
relating to the Audit Statement as promptly as reasonably practicable. Unless otherwise provided herein, all disputes under this
Section 5.5 shall be settled by arbitration pursuant to Section 8.7(b).

 

    	[**] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
 
13 

     

    

 

5.6            Acknowledgement
of No Future Funding. Company acknowledges and agrees that the Investors have not made any representation, undertaking, commitment
or agreement to provide or assist Company in obtaining any financing, investment or other assistance, other than the funding as
expressly and unambiguously set forth herein and subject to the conditions set forth herein. In addition, Company acknowledges
and agrees that (i) no statements, whether written or oral, made by an Investor or its Representatives on or after the date of
this Agreement shall create an obligation, commitment or agreement to provide or assist Company in obtaining any financing or investment,
(ii) Company shall not rely on any such statement by an Investor or its Representatives and (iii) an obligation, commitment or
agreement to provide or assist Company in obtaining any financing or investment may only be created by a written agreement, signed
by an Investor and Company, setting forth the terms and conditions of such financing or investment and stating that the parties
intend for such writing to be a binding obligation or agreement.

 

6.            Term.
This Agreement shall commence as of the date hereof and shall continue until the full payment by the Company to the Investors pursuant
to Sections 2.4 and 2.5 herein.

 

    	[**] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
 
14 

     

    

 

7.            Notices.
All notices and other communications provided for herein shall be made in writing and delivered by hand or overnight courier service
(which term includes a courier delivery service such as FedEx or United Parcel Service), or sent by e-mail, as follows:

 

	If to the Company:	 	Crossroads Systems, Inc.
	 	 	11000 North Mo-Pac Expressway #150
	 	 	Austin, Texas 78759
	 	 	Attention: Richard K. Coleman, Jr.
	 	 	Telephone: (512) 928-7333
	 	 	Email: rcoleman@crossroads.com
	 	 	 
	With a copy to:	 	Olshan Frome Wolosky LLP
	 	 	65 East 55th Street
	 	 	New York, New York 10022
	 	 	Attention: Adam W. Finerman, Esq.
	 	 	Telephone: (212) 451-2289
	 	 	Email: afinerman@olshanlaw.com
	 	 	 
	If to TQ Zeta:	 	TQ Zeta LLC
	 	 	Attn: Techquity Capital Management
	 	 	805 Las Cimas Parkway Suite 240
	 	 	Austin, TX 78746
	 	 	Attention: Mark Roche, Managing Director
	 	 	Email: mroche@techquitycap.com
	 	 	 
	With a copy to:	 	Nixon Peabody LLP
	 	 	Key Towers at Fountain Plaza
	 	 	40 Fountain Plaza, Suite 500
	 	 	Buffalo, NY 14202-2224
	 	 	Attention: John Koeppel, Esq.
	 	 	Telephone: (716) 853-8137
	 	 	Email: JKoeppel@nixonpeabody.com
	 	 	 
	If to Intrepidus Holdings LLC (provided, that Intrepidus Holdings LLC may notify the Company of additional persons to be notified on its behalf by the Company):	 	
        Chadbourne & Parke LLP

        1301 Avenue of the Americas

        New York, New York, 10019-6022

        Attention: Frank S. Vellucci

        Telephone: (212) 408-1127

        Email: fvellucci@chadbourne.com

 

Any notices and other communication sent
by hand shall be deemed received upon delivery. Any notices and other communication sent by overnight courier service shall be
deemed received one (1) Business Day after it is sent by overnight mail. Any notices and other communications sent by e-mail shall
be deemed received upon the sender’s receipt of an acknowledgment from the intended recipient (such as by the “return
receipt requested” function, return e-mail or other written acknowledgment).

 

    	[**] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
 
15 

     

    

 

8.            Miscellaneous.

 

8.1            Exculpation
and Indemnification; Obligations of the Investors.

 

		(a)	The Company agrees that there shall be no liability of an Investor and each of its Representatives under this Agreement, the
Patents or the Patent Litigation, or related to its acts or omissions in connection with this Agreement, except in the case of
a material breach of this Agreement by such person that has a material adverse effect on the Company.

 

		(b)	The Company agrees to promptly indemnify, defend, and hold harmless each Investor and its Representatives from and against
all liabilities, losses, diminution in value, claims, judgments, charges, sanctions, penalties, damages, expenses and costs (including,
without limitation, reasonable attorneys’, accounting and expert fees, legal costs and expenses) such person may incur relating
to, or arising out of, breaches by the Company under this Agreement and from and against all claims by third parties relating to,
or arising out of, this Agreement. The Company also agrees to advance to each Investor and its Representatives all defense costs,
including reasonable attorneys’ fees and expenses, relating to, or arising out of, breaches by the Company under this Agreement
and for any third-party claim relating to, or arising out of, this Agreement.

 

		(c)	In no event shall one Investor have any liability or obligation to the Company or any of its Affiliates with respect to the
acts or omissions of any other Investor.

 

8.2            Taxes.
All Taxes shall be the financial responsibility of the party obligated to pay such Taxes as determined by applicable law and neither
party is or shall be liable at any time for any of the other party’s Taxes incurred in connection with or related to amounts
paid under this Agreement. No Tax shall be withheld by the Company on any Net Cash Proceeds payable to the Investors hereunder
unless required by law.

 

8.3            Specific
Waivers. To the greatest extent permissible by law, the Company releases, discharges and quitclaims any claims, counterclaims,
defenses, causes of action, remedies, or rights it or its successors in interest has or may in the future have arising from any
doctrine, rule, or principle of law or equity that this Agreement, or the relationships or transactions contemplated by this Agreement
(i) are against the public policy of any jurisdiction with which the Company has a connection or (ii) constitute maintenance or
any impermissible transfers, assignments or splitting of property, fees or causes of action.

 

8.4            Relationships
of the Parties. The Company and each Investor are independent actors. This Agreement does not create any joint venture, partnership,
agency relationship or any other type of affiliation among any of the parties.

 

    	[**] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
 
16 

     

    

 

8.5            Assignment.
This Agreement shall inure to the benefit of and shall be binding upon the parties hereto and their respective successors and permitted
assigns. This Agreement shall not be assignable (whether voluntarily or involuntarily, directly or indirectly or by operation of
law) by any party without (i) in the case of a proposed assignment by an Investor, the written consent of the Company and (ii)
in the case of a proposed assignment by the Company, the written consent of the Investors; provided, that no party shall
unreasonably withhold its consent to a proposed transfer by another party. Any such purported assignment without such consent shall
be void.

 

8.6            Third
Party Rights. Except as provided by Section 8.1, this Agreement shall not create benefits on behalf of any other Person,
and this Agreement shall be effective only as between the parties hereto, their successors and permitted assigns.

 

8.7            Governing
Law; Arbitration.

 

		(a)	This Agreement shall be construed, and the legal relations between the parties hereto shall be determined, in accordance with
the laws of the United States of America and the State of Delaware, as such laws apply to contracts signed and fully performed
in such state without regard to the principles of conflicts of laws thereof.

 

		(b)	Any controversy or claim arising out of or relating to this Agreement, or the breach thereof, which cannot be settled amicably
shall be determined by final and binding arbitration administered by the American Arbitration Association (“AAA”)
under its Commercial Arbitration Rules and Mediation Procedures then in effect (“Commercial Rules”).
The award rendered by the Arbitrators shall be final, non-reviewable, non-appealable and binding on the parties and may be entered
and enforced in any court having jurisdiction; provided, however, that any such determination shall be accompanied by a
written opinion of the Arbitrators giving the reasons for the determination. There shall be three arbitrators (the “Arbitrators”).
The parties agree that one Arbitrator shall be jointly appointed by the Investors and one Arbitrator by the Company within ten
(10) days of receipt by the applicable respondent of a request for arbitration (or, in default thereof, appointed by the AAA in
accordance with its Commercial Rules), and the third presiding Arbitrator shall be appointed by agreement of the two party-appointed
Arbitrators within fifteen (15) days of the appointment of the second Arbitrator or, in default of such agreement, by the AAA.
If more than one arbitration is commenced under this Agreement and any party contends that two or more arbitrations are substantially
related and that the issues should be heard in one proceeding, the Arbitrators selected in the first-filed proceeding shall determine
whether, in the interests of justice and efficiency, the proceedings should be consolidated before those Arbitrators. The seat
or place of arbitration shall be New York, New York. Except as may be required by law, neither a party nor the Arbitrators may
disclose the existence, content or results of any arbitration without the prior written consent of the parties to this Agreement,
unless to protect or pursue a legal right.

 

    	[**] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
 
17 

     

    

 

8.8            Confidential
Information.

 

		(a)	Each party hereto will keep the terms and existence of this Agreement, the identities of the parties hereto and their Affiliates,
and any non-public information concerning or relating to the Patent Litigation confidential and will not now or hereafter divulge
any of this information (collectively, “Confidential Information”) to any third party except (i) with
the prior written consent of the other parties, (ii) as may be required by applicable law, rule, regulation or legal process (including,
without limitation, the rules and regulations of the Securities Exchange Commission), (iii) during the course of litigation, so
long as the disclosure of such information is restricted in the same manner as is the confidential information of other litigating
parties, and (iv) in confidence to its Affiliates and its and their respective officers, directors, managers, employees, legal
counsel, accountants, financial advisors, partners, investors, clients, members, shareholders, lenders, agents, potential financing
sources, successors, assigns and other representatives (collectively, “Representatives”), who, in the
reasonable judgment of the disclosing party, need to know the Confidential Information, are informed of its confidential nature,
and are subject to confidentiality duties or other obligations that are no less restrictive than the terms and conditions of this
Section 8.8. Each party hereto agrees that it shall be responsible for any breach of this Section 8.8 by its Representatives.

 

		(b)	Notwithstanding anything to the contrary herein:

 

		(i)	Except as may be required by applicable law or legal process, no Investor shall discuss, correspond or otherwise communicate
with any defendant in the Patent Litigation or its representatives regarding any matters pertaining to the Patent Litigation, including,
without limitation, the terms and conditions of any settlement offers made or proposed to be made.

 

		(ii)	The parties agree that the Company may make such filings and disclosures of Confidential Information as it determines, upon
advice of counsel, are required by applicable law (including applicable securities laws) or court order, provided, that
the Company will first use its commercially reasonable efforts to seek confidential treatment for any information regarding the
identities of the Investors and their respective Representatives (including their contact information and the names of their signatories),
each Investor’s individual investment amount and Allocation Percentage on Schedule A, and any other Confidential Information
that the Company determines, upon advice of counsel, is permitted to be kept confidential under applicable law. If the Company’s
counsel advises that disclosure of Confidential Information is required under applicable law, then the Company shall only disclose
such Confidential Information to the extent advised by counsel.

 

    	[**] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
 
18 

     

    

 

8.9            Headings
and Interpretation. The headings of the sections are inserted for convenience of reference only and are not intended to be
a part of or to affect the meaning or interpretation of this Agreement. All parties hereto have been represented by counsel in
connection with the drafting and negotiation of this Agreement. Accordingly, in any legal proceeding involving this Agreement,
no rule of strict construction shall be applied in favor of or against any party by virtue of it having drafted any particular
clause or section.

 

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

 

8.11            Severability.
If any section of this Agreement is found by competent authority to be invalid, illegal or unenforceable in any respect for any
reason, the validity, legality and enforceability of any such section in every other respect and the remainder of this Agreement
shall continue in effect so long as the Agreement still expresses the intent of the parties. If the intent of the parties cannot
be preserved, this Agreement shall be either renegotiated or terminated.

 

8.12            Amendment.
This Agreement may not be amended except by an instrument in writing signed by the parties.

 

8.13            No
Waiver. No waiver by any party of any breach of any terms or conditions contained herein shall be construed as a waiver of
any other breach of the same or other terms or conditions herein. No delay or failure by any party in enforcing against the other
any term or condition of this Agreement shall be deemed a waiver of any right under this Agreement.

 

8.14            Entire
Agreement. This Agreement and its Exhibits embody the entire understanding of the parties with respect to the subject matter
hereof and merges all prior discussions between them (including but not limited to that certain Confidential Summary of Terms dated
as of October 11, 2015), and none of the parties shall be bound by any conditions, definitions, warranties, understandings or representations
with respect to the subject matter hereof other than as expressly provided herein.

 

8.15            Each
Party Bears its Own Costs. Except as expressly set forth herein, each Investor and the Company shall bear its own legal, accountancy
and other costs and expenses incurred by them in connection with this Agreement.

 

8.16            No
Practice of Law. The Investors and their Affiliates are engaged in an investment business that, among other things, invests
with patent holders to commercialize patents in exchange for a share of the awards of such commercialization. The Investors and
their Affiliates are not engaged in the practice of law with respect to the Patent Litigation and Company agrees that it shall
not rely upon the Investors and its Affiliates for legal or other professional advice.

 

    	[**] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
 
19 

     

    

 

8.17            Survival
after Termination. The provisions of Section 1 (with respect to applicable defined terms) and this Section 8
shall survive the termination of this Agreement.

 

    	[**] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
 
20 

     

    

 

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

 

	 	COMPANY:
	 	 
	 	CROSSROADS SYSTEMS, INC.
	 	 
	 	 
	 	By:	
        /s/ Richard K. Coleman, Jr.

	 	 	Name:	Richard K. Coleman, Jr.
	 	 	Title:	President and CEO

 

 

	 	INVESTORS:
	 	 
	 	TQ ZETA LLC
	 	 
	 	 
	 	By:	
        /s/ Mark Roche

	 	 	Name:	Mark Roche
	 	 	Title:	Managing Director

 

	 	 
	 	
        INTREPIDUS HOLDINGS LLC

	 	 
	 	 
	 	By:	
        /s/ Frank S. Vellucci

	 	 	Name:	Frank S. Vellucci
	 	 	Title:	Authorized Person

 

    	[**] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions 

     

    

 

Exhibit A

 

‘972 Patents

 

	Title	Application No	Application Date	Grant No	Grant Date
	Storage Router and Method for Providing Virtual Local Storage	09/001,799	12/31/97	5,941,972	08/24/99
	Storage Router and Method for Providing Virtual Local Storage	09/354,682	07/15/99	6,421,753	07/16/02
	Storage Router and Method for Providing Virtual Local Storage	09/965,339	09/27/01	6,425,036	07/23/02
	Storage Router and Method for Providing Virtual Local Storage	09/965,335	09/27/01	6,425,035	07/23/02
	Storage Router and Method for Providing Virtual Local Storage	10/081,110	02/22/02	6,789,152	09/07/04
	Storage Router and Method for Providing Virtual Local Storage	10/174,720	06/19/02	6,738,854	05/18/04
	Storage Router and Method for Providing Virtual Local Storage	10/361,283	02/10/03	6,763,419	07/13/04
	Storage Router and Method for Providing Virtual Local Storage	10/658,163	09/09/03	7,051,147	05/23/06
	Storage Router and Method for Providing Virtual Local Storage	11/851,724	09/07/07	7,689,754	03/30/10
	Storage Router and Method for Providing Virtual Local Storage	11/851,775	09/07/07	7,552,266	06/23/09
	Storage Router and Method for Providing Virtual Local Storage	11/851,837	09/07/07	7,694,058	04/06/10
	Storage Router and Method for Providing Virtual Local Storage	11/980,909	10/31/07	8,046,515	10/25/11
	Storage Router and Method for Providing Virtual Local Storage	11/947,499	11/29/07	7,984,221	07/19/11
	Storage Router and Method for Providing Virtual Local Storage	12/220,431	07/24/08	US RE42,761	09/27/11
	Storage Router and Method for Providing Virtual Local Storage	12/552,807	09/02/09	7,937,517	05/03/11
	Storage Router and Method for Providing Virtual Local Storage	12/552,885	09/02/09	7,934,040	04/26/11
	Storage Router and Method for Providing Virtual Local Storage	12/552,913	09/02/09	8,015,339	09/06/11
	Storage Router and Method for Providing Virtual Local Storage	12/690,592	01/20/10	7,934,041	04/26/11
	Storage Router and Method for Providing Virtual Local Storage	12/910,431	10/22/10	7,984,224	07/19/11
	Storage Router and Method for Providing Virtual Local Storage	12/910,375	10/22/10	8,028,117	09/27/11
	Storage Router and Method for Providing Virtual Local Storage	12/910,476	10/22/10	8,402,193	03/19/13

 

    	[**] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions 

     

    

 

	Title	Application No	Application Date	Grant No	Grant Date
	Storage Router and Method for Providing Virtual Local Storage	12/910,515	10/22/10	7,987,311	07/26/11
	Storage Router and Method for Providing Virtual Local Storage	13/197,534	08/03/11	8,402,194	03/19/13
	Storage Router and Method for Providing Virtual Local Storage	13/766,301	02/13/13	 	 
	Storage Router and Method for Providing Virtual Local Storage	2,315,199	12/28/98	2,315,199	01/21/03
	Storage Router and Method for Providing Virtual Local Storage	98966104.6	12/28/98	69832818.3	12/14/05
	Storage Router and Method for Providing Virtual Local Storage	98966104.6	12/28/98	1044414	12/14/05
	Storage Router and Method for Providing Virtual Local Storage	98966104.6	12/28/98	1044414	12/14/05
	Storage Router and Method for Providing Virtual Local Storage	98966104.6	12/28/98	1044414	12/14/05
	Storage Router and Method for Providing Virtual Local Storage	526873/2000	12/28/98	4691251	02/25/11
	Storage Router and Method for Providing Virtual Local Storage	10012770.3	10/01/10	 	 
	Storage Router and Method for Providing Virtual Local Storage	10012768.7	10/01/10	 	 

 

    	[**] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions 

     

    

 

Exhibit B

 

Percentage Payment

 

	Net Cash Proceeds Tier	Crossroads	Investors
	First $20 million	48%	52%
	Above $20 million and up to $100 million	60%	40%
	Above $100 million	88%	12%

 

    	[**] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions 

     

    

 

Exhibit C

 

Permitted Expenses

 

	Permitted Expenses	Allowed Amount
	Legal, licensing and other expenses related to the Crossroads ‘972 patent family	100%
	Legal, licensing and other expenses related to current or future lawsuits against Crossroads filed by ‘972 patent family potential licensees or defendants in response to ‘972 patent enforcement 	100%
	Legal and other expenses related to ‘972 patent family prosecution, maintenance, and USPTO proceedings, including IPRs	100%
	Lump sum monthly payment for salary, bonus and benefits compensation for IP management executives (Rick Coleman – approximately 70%; Mark Hood – approximately 70%; and Jennifer Crane – approximately 50%)	No more than $83,000 monthly
	Company “out-of-pocket” expenses related to ‘972 litigation	100%
	Lump sum monthly payment for miscellaneous IP related overhead (rent, employee depositions, technical support, etc.)	No more than $20,000 monthly

 

    	[**] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions 

     

    

 

Schedule A

 

Allocation Schedule

 

	Investor	Investment Amount	Allocation Percentage
	TQ Zeta LLC	[**]	[**]
	Intrepidus Holdings LLC	[**]	[**]
	Total	$10,000,000	100%

 

    	[**] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions

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