Document:

EXHIBIT 4.2

 

EXECUTION COPY

 

 

 

 

 

 

NEXSAN CORPORATION

 

 

 

 

 

 

 

 

 

 

 

THIRD AMENDED AND RESTATED REGISTRATION RIGHTS
AGREEMENT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dated as of 
March 29, 2007

 

 

 

THIRD
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT,
dated as of March 29, 2007,
(the “Agreement”) among NEXSAN CORPORATION,
a Delaware corporation (the “Corporation”), the PRIOR
STOCKHOLDERS (as herein defined), the OTHER RIGHTS
HOLDERS (as herein defined), the SERIES A
INVESTORS  (as herein
defined)  and SERIES C
INVESTORS (as herein defined).

 

WHEREAS, the
Corporation, certain Prior Stockholders and Series A Investors are a party
to a Second Amended and Restated Registration Rights Agreement dated October 27,
2003, as amended by (i) Amendment No. 1 to the Second Amended and Restated
Registration Rights Agreement dated March 24, 2005, (ii) Amendment No. 2 to the Second
Amended and Restated Registration Rights Agreement dated April       ,
2005 and (iii) Amendment No. 3 to the Second Amended and Restated
Registration Rights Agreement dated August     , 2005
(the “Second Amended and Restated Registration Rights Agreement”);

 

WHEREAS,
contemporaneously herewith the Corporation is entering into a Series C
Purchase Agreement (as herein defined) pursuant to which Fonds de solidarite des
travailleurs du Quebec (F. T. Q.) has or will acquire shares of the Corporation’s
Series C Preferred Stock;

 

WHEREAS,
contemporaneously herewith, the Corporation is issuing the Corporation’s Series C
Preferred Stock to certain bridge lenders in connection with their conversion
of the 8% Convertible Subordinated Bridge Notes dated August 8, 2006
issued by the Company in the aggregate principal amount of $2 million;

 

WHEREAS,
contemporaneously herewith, the Corporation is issuing the Corporation’s Series C
Preferred Stock to certain lenders in connection with their conversion of the
8% Secured Convertible Promissory Notes dated January 27, 2006 issued by
the Company in the aggregate principal amount of $2 million;

 

WHEREAS, the
Corporation and the other parties hereto deem it to be in their respective best
interests to amend and restate the Second Amendment and Registration Rights
Agreement in connection with the issuance of the Corporation’s Series C
Preferred Stock to the Series C Investors;

 

WHEREAS, Section 18
of the Second Amended and Restated Registration Rights Agreement provides that
it may be amended pursuant to a writing signed by (i) the Corporation, (ii) Stockholders
holding a majority of the Registrable Shares and (iii) the Series A
Investors holding a majority of the Registrable Shares held by all Series A
Investors then outstanding.

 

NOW,
THEREFORE, in consideration of the promises and mutual
covenants and obligations hereinafter set forth, the parties hereto hereby
agree as follows:

 

 

 

Section 1.               Definitions.

 

As used in this Agreement, the
following terms shall have the following meanings:

 

“Acquisition
Stockholders” means those Persons who own Common Stock or securities of the
Corporation convertible into or exchangeable for Common Stock which was
acquired in connection with the acquisition by the Corporation of AESign
Evertrust Inc., a company incorporated federally under the Canada Business
Corporations Act.

 

“Board”
means the Board of Directors of the Corporation.

 

“Business Day”
means a day when banks are not required or permitted to close in the State of
New York or in the Province of Québec, Canada.

 

“Canadian
Securities Laws” includes the Québec Securities Act and any other similar
legislation in any other province in which the Corporation is or becomes a
reporting issuer.

 

“Commission”
means (i) the United States Securities and Exchange Commission or any
other Federal agency at the time administering the Securities Act or (ii) where
applicable in this Agreement, the applicable securities commission or
corresponding regulatory authority administering the relevant securities
legislation under Canadian Securities Laws.

 

“Common Stock”
means the common stock, $0.001 par value per share, of the Corporation.

 

“Demanding
Investors” has the meaning ascribed to such term in Section 2(a).

 

“Exchange Act”
means the Securities Exchange Act of 1934 or any successor Federal statute, and
the rules and regulations of the Commission promulgated thereunder, all as
the same shall be in effect from time to time.

 

“Initial
Registration” means the Corporation’s initial public offering.

 

“Long-Form Registration”
means any Registration that is not a Short-Form Registration.

 

“Other Rights
Holders” means Comerica Bank and Orix Venture Finance LLC.

 

“Person”
shall be construed broadly to include any individual, partnership, limited
liability Corporation, corporation, affiliated group, trust or other legal
entity.

 

“Preferred
Registrable Shares” means the Series A Preferred Registrable Shares
and the Series C Preferred Registrable Shares.

 

“Primary Shares”
means at any time the authorized but unissued shares of Common Stock.

 

2

 

“Prior Common
Registrable Shares” means any shares of Common Stock held by the Prior
Stockholders (including shares of Common Stock issued or issuable on exercise
of the warrants issued to and held by certain of the Prior Stockholders) not
issued upon conversion of any series of preferred stock.  In addition, the shares of Common Stock
issued or issuable upon exercise of the warrant issued to Orix Venture Finance
LLC in connection with the Loan and Security Agreement dated August     ,
2005 entered into between Orix Venture Finance LLC and the Corporation shall be
deemed to be Prior Common Registrable Shares exclusively for purposes of
Sections 3 and 4 of this Agreement.

 

“Prior
Stockholders” means those holders of shares of Common Stock listed on Schedule
I attached hereto, including without limitation the Acquisition
Stockholders, and subject to Section 16
hereof, includes any successor to, or assignee or transferee of, any such
person who or which agrees in writing to be treated as a Prior Stockholder
hereunder and to be bound by the terms and comply with all applicable
provisions hereof.

 

“Prospectus”
means any of:

 

(a)                                  a “prospectus” as
that term is used in the U.S. Securities Act;

 

(b)                                 a “registration
statement” as that term is used in the U.S. Securities Act; and

 

(c)                                  a “preliminary
prospectus” and a “prospectus” as those terms are used in the Québec Securities
Act; and

 

including in each
case all amendments, supplements and exhibits thereto.

 

“Québec
Securities Act” means the Securities Act (Québec) as it may be amended from
time to time and any successor legislation.

 

“Registrable
Shares” means the Series C Preferred Registrable Shares, the Series A
Preferred Registrable Shares and the Prior Common Registrable Shares, as
applicable.

 

“Registration”
means a registered offering in the United States and does not include a
registration under the Securities Act made solely in respect of a merger,
acquisition or employee benefits plan or the qualification of a distribution of
shares of Common Stock to the public by way of a Prospectus under securities
legislation in any applicable jurisdiction in Canada, and “Register” has the
corresponding meaning.

 

“Registration
Expenses” means all expenses incurred by the Corporation in complying with Section 2, Section 3, Section 4 and Section 6 including, without limitation, all
registration and filing fees, printing expenses, fees and disbursements of
counsel for the Corporation and independent public accountants or chartered
accountants for the Corporation, fees and expenses (including counsel fees)
incurred in connection with complying with state securities laws and Canadian
Securities Laws, stock exchange listing fees, fees of the National Association
of Securities Dealers, Inc. and any successor institution, transfer taxes,
fees of transfer agents and registrars, costs of insurance and fees and
disbursements of one legal counsel for the sellers of Registrable Shares but
excluding any Selling Expenses.

 

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“Restricted
Shares” means shares of Common Stock held by any Stockholder and any other
securities which by their terms are exercisable or exchangeable for or
convertible into shares of Common Stock or other securities which are so
exercisable, exchangeable or convertible and any securities received in respect
thereof, which are held by such Stockholder. 
As to any particular Restricted Shares, once issued, such Restricted
Shares shall cease to be Restricted Shares when (i) they have been
registered under the Securities Act, the registration statement in connection
therewith has been declared effective and they have been disposed of pursuant
to such effective registration statement, (ii) they are eligible to be
sold or distributed pursuant to Rule 144 (including, without limitation, Rule 144(k))
within any consecutive three month period without volume or manner of sale
limitations, or (iii) they shall have ceased to be outstanding.

 

“Rule 144”
means Rule 144 promulgated under the Securities Act or any successor rule thereto.

 

“Second Amended
and Restated Registration Rights Agreement” has the meaning ascribed to
such term in the introductory paragraphs of this Agreement

 

“Securities Act”
means the Securities Act of 1933, as amended, or any successor Federal statute,
and the rules and regulations of the Commission thereunder, all as the
same shall be in effect from time to time.

 

“Selling
Expenses” means all underwriting discounts, selling commissions and stock
transfer taxes applicable to the sale of Registrable Shares.

 

“Series A
Investors “ means the holders of the Corporation’s Series A Preferred
Stock (including shares of Common Stock issuable upon the conversion thereof)
listed on Schedule II attached hereto, and subject to Section 16 hereof, includes any successor to, or assignee
or transferee of, any such person who or which agrees in writing to be treated
as a Series A Investor hereunder and to be bound by the terms and comply
with all applicable provisions hereof.

 

“Series A
Preferred Registrable Shares” means the Restricted Shares issued or
issuable upon conversion of shares of Series A Preferred Stock.  In addition, the Series A Preferred
Stock issued or issuable upon exercise of the warrant issued by the Corporation
to Comerica Bank in connection with the First Amendment to Loan and Security
Agreement dated April 22, 2005 between the Corporation and Comerica Bank
shall be deemed to be Series A Preferred Registrable Shares exclusively
for purposes of Section 3 of this Agreement.

 

“Series A
Preferred Stock” means the Corporation’s Series A Convertible
Preferred Stock, $0.001 par value per share.

 

“Series A
Purchase Agreement” means the Series A Purchase Agreement, dated October 27,
2003, among the Corporation and the Series A Investors with respect to the
purchase and sale of shares of the Corporation’s Series A Preferred Stock.

 

 “Series C Investors”  means the holders of the Corporation’s Series C
Preferred Stock (including shares of Common Stock issuable upon conversion
thereof) listed on Schedule III attached hereto, and subject to Section 16 hereof, includes any successor to, or assignee
or transferee of, any such person who or which agrees in writing to be treated
as a Series C Investor hereunder and to be bound by the terms and comply
with all applicable provision hereof.

 

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                                “Series C
Preferred Registrable Shares” means the Restricted Shares issued or
issuable upon conversion of shares of Series C Preferred Stock.

 

                                “Series C
Preferred Stock” means the Corporation’s Series C Convertible
Preferred Stock, $0.001 par value per share.

 

                                “Series C
Purchase Agreement” means the Subscription Agreement, dated as of March 29,
2007, between the Corporation and le Fonds de solidarite des travailleurs du
Quebec (F.T.Q.) with respect to the purchase and sale of shares of Series C
Preferred Stock.

 

“Short-Form Registration”
means a registration on Form S-3 under the Securities Act  as may be amended or replaced from time to time.

 

“Stockholders”
means  the Series C Investors, the Series A
Investors, the Prior Stockholders and the Other Rights Holders.

 

Section 2.               Long-Form Demand
Registration.

 

(a)                                  At any time
following the earlier of three years from the date of the Closing (as such term
is defined in the Series C Purchase Agreement) or six months after the
Corporation’s Initial Registration if the holders of either more than 50% of
the Series C Preferred Registrable Shares then outstanding, more than 50%
of the Series A Preferred Registrable Shares then outstanding or more than
50% of the Prior Common Registrable Shares then outstanding (the “Demanding
Investors”) shall in writing state that such holders desire to sell
Registrable Shares in the public securities markets and request the Corporation
to effect the Registration of such Registrable Shares, the Corporation will:

 

(i)                                     give notice of such
requested Registration to Series C Investors, Series A Investors and
Prior Stockholders who did not request Registration hereunder within 10
Business Days after the Corporation’s receipt of the notice from the Demanding
Investors;

 

(ii)                                  subject to Section 2(a)(iii) below, the Corporation
shall include in such Registration all Registrable Shares specified in a
written request by such Stockholders and received by the Corporation within 10
Business Days after the written notice from the Corporation described in Section 2(a)(i) above is delivered by the
Corporation.  Such written request may
specify all or a part of a Stockholder’s Registrable Shares; and

 

(iii)                               use its best
efforts to effect such Registration (including, without limitation, filing
post-effective amendments, appropriate qualifications under, where applicable,
the Securities Act, Canadian Securities Laws, blue sky laws and/or other United
States securities laws, and appropriate compliance with the Securities Act) as
soon as practicable, but in any 

 

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                                                event,
subject to Section 2(c), file or cause to be filed a registration
statement within ninety (90) days after the receipt of the initial written
request by the Demanding Investors, and as would permit or facilitate the
Registration of all or such portion of such Registrable Shares as are specified
in such request, together with all or such portion of the Registrable Shares of
any non-Demanding Investor joining in such demand Registration as are specified
in a written request made in accordance with Section 2(a)(ii) above; provided,
however, that if the managing underwriter, if any, advises the
Corporation that the inclusion of all Registrable Shares and/or Primary Shares
proposed to be included in such Registration would be materially detrimental to
the successful marketing (including pricing) of the Registrable Shares proposed
to be included in such Registration, then the number of Registrable Shares of
the Demanding Investors and the non-Demanding Investors, if any, and Primary
Shares proposed to be included in such Registration shall be included in the
following order:

 

(A)                              first, the
Preferred Registrable Shares requested to be included in such Registration (or,
if necessary, such Preferred Registrable Shares pro rata
among the holders thereof based on the number of Preferred Registrable Shares
requested to be included in such Registration by each such holder);

 

(B)                                second, the
Prior Common Registrable Shares (or, if necessary, such Prior Common
Registrable Shares pro rata among
the holders thereof based on the number of Prior Common Registrable Shares
requested to be included in such Registration by each such holder); and

 

(C)                                third, any
Primary Shares.

 

(b)                                 The
Corporation shall not be obligated to use its best efforts to file and cause to
become effective more than (i) two completed Long-Form Registrations
pursuant to Section 2(a) for
the holders of Preferred Registrable Shares and (ii) one Long-Form Registration
for the holders of Prior Common Registrable Share; provided that (1) any
Long-Form Registration in which the lead underwriter reduces the aggregate
number of Preferred Registrable Shares to be included in such Registration by
more than 25% or (2) any Long-Form Registration for the Series C
Preferred Registrable Shares, Series A Preferred Registrable Shares and
the Prior Common Registrable Shares that occurs after the delivery of a written
notice by the Corporation under Section 2(c) shall not constitute one of the
two Long-Form Registrations permitted for the holders of Preferred
Registrable Shares or the one Long-Form Registration permitted for the
holders of Prior Common Registrable Shares under Section
2(a).

 

(c)                                  The Corporation
shall not be obligated to effect, or to take any action to effect, any such
Registration pursuant to Section 2(a)  if:

 

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(i)                                     the Corporation
shall furnish to the Stockholders a certificate signed by the President of the
Corporation stating that in the good faith judgment of the Board, the effect of
the Demand Registration would materially impede the ability of the Corporation
to consummate a significant transaction or there exists at the time of the
request specified in Section 2(a)
material non-public information relating to the Corporation the disclosure of
which would be seriously detrimental to the Corporation and that it is in the
best interests of the Corporation to defer the filing of a registration
statement in respect of the demand Registration until a date that is not more
than 90 days from the date of receipt of the request specified in Section 2(a); provided however, that the Corporation shall
not defer its obligation in this manner pursuant to this Section 2(c)(i) more than once in any 12
month period; or

 

(ii)                                  at the time of such
request, the Corporation is engaged in a self-tender or exchange offer and the
filing of a Prospectus would cause a violation of the Exchange Act or
applicable Canadian Securities Laws; or

 

(iii)                               within 30 days of
receipt of a written request that the Corporation effect a demand Registration
pursuant to Section 2(a), the
Corporation delivers a written notice to all holders of Registrable Shares of
its intent to file a Prospectus for its Initial Registration within 90 days of
the Corporation’s receipt of such written request; provided, however, that the
Corporation shall not defer its obligation pursuant to this Section 2 (c) (iii) more
than once in any 12 month period; or

 

(iv)                              such demand
Registration will be completed within the 90 day period commencing on the date
of any Registration in which the Stockholders were entitled (subject to
underwriter cutbacks) to include Registrable Shares pursuant to this Agreement;
or

 

(v)                                 such demand
Registration will be completed within the 180 day period commencing on the date
of the Corporation’s Initial Registration.

 

(d)                                 If the Demanding
Investors so elect, the Registration of the Registrable Shares shall be in the
form of an underwritten offering. The Stockholders (Demanding Investors and
non-Demanding Investors) holding a majority of the Registrable Shares requested
to be included in such Registration shall select one or more nationally
recognized firms of investment bankers reasonably acceptable to the Corporation
to act as the lead managing underwriter or underwriters in connection with such
offering.

 

(e)                                  At any time before
the registration statement covering Registrable Shares pursuant to Section 2(a) becomes effective, the holders of a majority
of the Registrable Shares requested to be included in such Registration (Demanding
Investors and non-Demanding Investors) may request the Corporation to withdraw
or not to file the registration statement. 
In that event, unless such request of withdrawal was caused by, or made (A) as
a result of a delay pursuant 

 

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                                                to Section 2(c) above, (B) in response to, the material
adverse effect of an event on the business, properties, condition, financial or
otherwise, or operations of the Corporation not actually known (without
imputing the knowledge of any other Person to such holders) by a majority of
such holders at the time the initial written request of the Demanding Investors
was made, or (C) in response to material information with respect to the
Corporation not actually known (without imputing the knowledge of any other
Person to such holders) by a majority of such holders at the time the initial
written request of the Demanding Investors was made, which material information
would make it inadvisable or difficult to effect such Registration, then the
holders shall be deemed to have used one of their Long-Form Registrations
permitted under Section 2(a) and
the Corporation shall no longer be obligated to Register Registrable Shares
pursuant to the exercise of such Long-Form Registration pursuant to Section 2(a) unless the holders of Registrable Shares
reimburse the Corporation for the expenses incurred by the Corporation through
the date of the Corporation’s receipt of such request to withdraw or not file
the Prospectus.

 

Section 3.               Piggyback
Registration.

 

(a)                                  If the Corporation
proposes for any reason to Register Primary Shares under the Securities Act
and/or the Canadian Securities Laws (including the Initial Registration), it
shall give written notice to the Stockholders of its intention to so register
such Primary Shares at least thirty (30) days before the initial filing of the
registration statement and, upon the written request, delivered to the
Corporation within twenty (20) days after delivery of any such notice by the
Corporation, of the Stockholders to include in such Registration of Registrable
Shares (which request shall specify the number of Registrable Shares proposed
to be included in such Registration and shall state that such Stockholders
desire to sell such Registrable Shares in the public securities markets), the
Corporation shall use its best efforts to cause all such Registrable Shares to
be included in such Registration on the same terms and conditions as the
securities otherwise being sold in such Registration; provided, however,
that if the managing underwriter, if any, advises the Corporation that the
inclusion of all Registrable Shares requested to be included in such
Registration would be materially detrimental to the successful marketing
(including pricing) of the Primary Shares proposed to be included in such
Registration, then the number of Primary Shares and Registrable Shares proposed
to be included in such Registration shall be included in the following order:

 

(i)                                     first, the
Primary Shares; and

 

(ii)                                  second, the
Preferred Registrable Shares and the Prior Common Registrable Shares requested
to be included in such Registration  pro rata among the holders thereof based on the number of
Registrable Shares requested to be included in such Registration by each such holder.

 

8

 

(b)                                 For the purposes of
cutbacks pursuant to this Section 3, in
no event shall the aggregate amount of the Registrable Shares held by the Series C
Investors and Series A Investors included in the registration be reduced
below 20% of the aggregate amount of securities included in such registration,
except with respect to registration of securities in connection with the
Corporation’s Initial Registration wherein the aggregate amount of Registrable
Shares held by the Series C Investors and Series A Investors included
in the registration may be reduced to zero. 
In the event the Registrable Shares held by the Series C Investors
and the Series A Investors is so limited to 20% as set forth in this Section 3(b), then no other Stockholder shall be allowed to
sell any Registrable Shares in such registration.

 

Section 4.               Short-Form Demand
Registration.

 

(a)                                  After such time as
the Corporation has completed an Initial Registration, it shall use its best
efforts to become eligible, and to thereafter remain eligible, to satisfy all
of the requirements for use of a Short-Form Registration other than the
reporting history requirement and the public float requirement. Anything
contained in Section 2 to the contrary notwithstanding, at such time as
the Corporation shall have qualified for the use of a Short-Form Registration,
the  holders of the Series C
Preferred Registrable Shares then outstanding, the holders of the Series A
Preferred Registrable Shares then outstanding and the holders of Prior Common
Registrable Shares then outstanding shall have the right to request in writing
an unlimited number of Short-Form Registrations, which written request or
requests shall (i) specify the number of Registrable Shares intended to be
sold or disposed of and the holders thereof, (ii) state the intended
method of disposition of such Registrable Shares and (iii) relate to
Registrable Shares having an aggregate offering price of at least two million
dollars ($2,000,000).  The Corporation
shall not be obliged to effect more than two registrations in any 12-month
period.  A request for a Short-Form Registration
shall not count as a Long-Form Registration  initiated pursuant to Section 2(a).

 

(b)                                 If the Corporation
shall receive a written request that the Corporation effect any Registration
pursuant to Section 4 (a) with
respect to all or a part of the Registrable Shares, the Corporation will:

 

(i)                                     within ten Business
Days of such receipt, give written notice of the proposed Registration to all
the Stockholders; and

 

(ii)                                  use its best
efforts to effect such Registration (including, without limitation, filing
post-effective amendments and appropriate qualifications under the applicable
securities laws of the United States and the Canadian Securities Laws) as soon
as practicable, but in any event, subject to Section 2(c), file or cause
to be filed a registration statement within ninety (90) days after the receipt
by the Corporation of the written request to effect any such Registration, and
as would permit or facilitate the Registration of all or such portion of such
Registrable Shares as are specified in such request, together with all or such
portion of the Registrable Shares of any Stockholder or Stockholders joining in
such request as are specified in a written request received by the Corporation 

 

9

 

                                                within
20 days after the written notice from the Corporation described in Section 4(b)(i) is delivered by the
Corporation.  [Notwithstanding any other
provision contained herein, if the managing underwriter, if any, determines in
good faith that marketing factors require a limitation of the number of
securities of the Corporation to be underwritten, no Registrable Shares will be
so excluded unless the underwriter first excludes all other securities of the
Corporation proposed to be included in such Registration (including securities
for the account of the Corporation) and the underwriter shall then allocate the
number of Registrable Shares in the following order:

 

(A)                              first, the
Primary Shares; and

 

(B)                                second, the
Preferred Registrable Shares and the Prior Common Registrable Shares requested
to be included in such Registration pro rata among
the holders thereof based on the number of Registrable Shares requested to be
included in such Registration by each such holder.

 

Section 5.               Lock-Up
Agreement.

 

In connection with
the Initial Registration, each Stockholder agrees that he, she or it, shall,
upon request of the managing underwriter, not sell publicly, make any short
sale of, grant any option for the purchase of, or otherwise dispose publicly
of, any shares of Common Stock (other than those shares of Common Stock
included in such Registration) without the prior written consent of the
managing underwriter, for a period (the “Lockup Period”) designated by
the managing underwriter in writing to the Stockholders, which period shall not
exceed 180 days after the effective date of the Prospectus, plus such period
thereafter as may be necessary to comply with applicable National Association
of Security Dealers, Inc. rules; provided, however, that
each executive officer, director and holder of 1% or more of the Corporation’s
outstanding capital stock must agree to a Lockup Period of at least the same
duration.  The Corporation shall obtain
the agreement of any person permitted to sell shares of stock in a Registration
to be bound by and to comply with this Section
5 as if such person was a Stockholder hereunder.  Notwithstanding the foregoing, in the event
any of the agreements or restrictions set forth above are waived or terminated
with respect to any holder of securities of the Corporation, then the foregoing
provisions shall be waived or terminated with respect to each Series C
Investor, Series A Investor and Prior Stockholder to the same extent.

 

Section 6.               Preparation
and Filing.

 

(a)                                  If and whenever the
Corporation is under an obligation pursuant to the provisions of this Agreement
to use its best efforts to effect a Registration of any Registrable Shares, the
Corporation shall as expeditiously as practicable:

 

(i)                                     use its best
efforts to prepare and file with the appropriate securities regulatory
authorities a Prospectus and any other documents necessary, including
amendments and supplements in respect of those documents, to permit the
Registration and use its best efforts to keep such Registration effective for a
period of 120 days or until the Stockholder or Stockholders have completed the
Registration in compliance with all applicable securities laws, whichever first
occurs;

 

10

 

(ii)                                  furnish, at least
five Business Days before filing a Prospectus or any amendments or supplements
relating to such Prospectus, to one counsel selected by the holders of Registrable
Shares requesting such Registration (the “Stockholders’ Counsel”),
copies of all such documents proposed to be filed (it being understood that
such five Business-Day period need not apply to successive drafts of the same
document proposed to be filed so long as such successive drafts are supplied to
the Stockholders’ Counsel in advance of the proposed filing by a period of time
that is customary and reasonable under the circumstances);

 

(iii)                               prepare and file
with the Commission such amendments and supplements to such Prospectus used in
connection therewith as may be necessary to keep such Prospectus effective
until all of such Registrable Shares have been disposed of and to comply with
the provisions of the Securities Act and/or Canadian Securities Laws with
respect to the Registration of such Registrable Shares;

 

(iv)                              notify in writing
the Stockholders’ Counsel (i) of the receipt by the Corporation of any
notification with respect to any comments by the Commission with respect to
such Prospectus or any amendment or supplement thereto or any request by the
Commission for the amending or supplementing thereof or for additional
information with respect thereto, (ii) of the receipt by the Corporation
of any notification with respect to the issuance by the Commission of any stop
order suspending the effectiveness of such Prospectus or any amendment or
supplement thereto or the initiation or threatening of any proceeding for that
purpose and (iii) of the receipt by the Corporation of any notification
with respect to the suspension of the qualification of such Registrable Shares
for sale in any jurisdiction or the initiation or threatening of any proceeding
for such purposes;

 

(v)                                 use its best
efforts to register or qualify such Registrable Shares under such other
securities or blue sky laws of such jurisdictions as the Series C
Investors and the Series A Investors 
reasonably request and do any and all other acts and things which may be
reasonably necessary or advisable to enable the Series C Investors and the
Series A Investors  to consummate
the Registration in such jurisdictions of the Registrable Shares owned by the Series C
Investors and the Series A Investors ; provided, however,
that the Corporation will not be required to qualify generally to do business,
subject itself to general taxation or consent to general service of process in
any jurisdiction where it would not otherwise be required to do so but for this
Section 6(a)(v) or to provide any
material undertaking or make any changes in its By-laws or Certificate of
Incorporation which the Board determines to be contrary to the best interests
of the Corporation or to modify any of its contractual relationships then
existing;

 

11

 

(vi)                              furnish to the
Stockholders such number of copies of a Prospectus, including preliminary
Prospectus, and such other documents incident thereto, including any amendment
or supplement to the Prospectus and such other documents as such Stockholders
may reasonably request in order to facilitate the Registration of such
Registrable Shares;

 

(vii)                           without limiting Section 6(a)(v) above, use its best efforts
to cause such Registrable Shares to be registered with or approved by such
other governmental agencies or authorities as may be necessary by virtue of the
business and operations of the Corporation to enable the Stockholders holding
such Registrable Shares to consummate the disposition of such Registrable
Shares;

 

(viii)                        notify each Stockholder
holding Registrable Shares covered by a Prospectus on a timely basis at any
time when a Prospectus relating to such Registrable Shares is required to be
delivered under the Securities Act and/or Canadian Securities Laws of the
occurrence of any material change or event as a result of which the Prospectus,
as then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then existing
and, promptly file such amendments and supplements which may be required on
account of such change or event and use its best efforts to cause such
amendment and supplement to become effective;

 

(ix)                                subject to the
execution of confidentiality agreements in form and substance satisfactory to
the Corporation, make available upon reasonable notice and during normal
business hours, for inspection by the Stockholders holding such Registrable
Shares, any underwriter participating in any Registration pursuant to such Prospectus
and any attorney, accountant or other agent retained by the Series C
Investors, Series A Investors 
and/or underwriter (collectively, the “Inspectors”), all
pertinent financial and other records, pertinent corporate documents and
properties of the Corporation (collectively, the “Records”), as shall be
reasonably necessary to enable them to exercise their due diligence
responsibility, and cause the Corporation’s officers, directors and employees
to supply all information (together with the Records, the “Information”)
reasonably requested by any such Inspector in connection with such
Prospectus.  Any of the Information which
the Corporation determines in good faith to be confidential, and of which
determination the Inspectors are so notified, shall not be disclosed by the
Inspectors unless (a) the disclosure of such Information is necessary to
avoid or correct a material misstatement or omission in the Prospectus, (b) the
release of such Information is ordered pursuant to a subpoena or other order
from a court of competent jurisdiction or (c) such Information has been
made 

 

12

 

                                                generally
available to the public through no breach of the nondisclosure obligations of
the Inspectors or their affiliates; the Series C Investors and Series A
Investors agree that they will, upon learning that disclosure of such
Information is sought in a court of competent jurisdiction, give notice to the
Corporation and allow the Corporation, at the Corporation’s expense, to undertake
appropriate action to prevent disclosure of the Information deemed
confidential;

 

(x)                                   use its best
efforts to furnish, at the request of any Stockholder requesting Registration
of Registrable Shares pursuant to this Section
6(a), on the date that such Registrable Shares are
delivered to the underwriters for sale in connection with a Registration
pursuant to this Section 6, if
such Registrable Shares are sold through underwriters, or if such Registrable
Shares are not being sold through underwriters, on the date that the Prospectus
with respect to such Registrable Shares becomes effective:

 

(A)                              a “cold comfort”
letter from the independent certified public accountants of the Corporation in
customary form and covering matters of the type customarily covered by cold
comfort letters addressed to the underwriters, if any, and to the Stockholders
requesting Registration of Registrable Shares; and

 

(B)                                an opinion or
opinions from the counsel of the Corporation in form and substance as is
customarily given to the underwriters in an underwritten public offering,
addressed to the underwriters, if any, and to the Stockholders requesting
Registration of Registrable Shares.

 

(xi)                                provide a transfer
agent and/or registrar (which may be the same entity and which may be the
Corporation) for such Registrable Shares;

 

(xii)                             issue to any
underwriter to which the Stockholders holding such Registrable Shares may sell
shares in such offering certificates evidencing such Registrable Shares;

 

(xiii)                          list such
Registrable Shares on any national securities exchange on which any shares of
the Common Stock are listed or, if the shares of Common Stock are not listed on
a national securities exchange, use its best efforts to qualify such
Registrable Shares for inclusion on the automated quotation system of the
National Association of Securities Dealers, Inc. (the “NASD”), or
such other national securities exchange as the holders of a majority of such
Registrable Shares shall reasonably request;

 

(xiv)                         otherwise use its best efforts
to comply with all applicable rules and regulations of the Commission and
make available to its Stockholders, as soon as reasonably practicable, earnings
statements (which need not be audited) covering a period of 12 months beginning
within three months after the effective date of the Prospectus; and

 

13

 

 

 

(xv)                            subject to all the
other provisions of this Agreement, use its best efforts to take all other
steps necessary to effect the Registration of such Registrable Shares
contemplated hereby.

 

(b)                                 Each holder of the
Registrable Shares, upon receipt of any notice from the Corporation of any
event of the kind described in Section
6(a) hereof, shall forthwith discontinue Registration of
the Registrable Shares pursuant to the Prospectus covering such Registrable
Shares until such holder’s receipt of the copies of the supplemented or amended
Prospectus contemplated by Section 6(a)  hereof, and, if so directed by the Corporation, such holder shall
deliver to the Corporation all copies, other than permanent file copies then in
such holder’s possession, of the Prospectus covering such Registrable Shares at
the time of receipt of such notice.

 

Section 7.               Registration
Expenses.

 

The Corporation
will pay all Registration Expenses in connection with all Registrations under Section 2(a), Section
3 or Section 4,
provided, however, that any of the expenses for any Registration or Prospectus
requested by any Stockholder pursuant to this Agreement and subsequently
withdrawn solely by the Stockholder, and not due to the exercise of the right
of the Corporation pursuant to Section
2(c) hereunder, will be borne by the Stockholder (or if
applicable, the Stockholders on a pro rata basis)
unless the Stockholders holding at least a majority of the then outstanding
Registrable Shares agree to forfeit their right to one Long-Form Registration
pursuant to Section 2(b);
provided, further that, if at the time of that withdrawal, the Stockholder has
learned of a material adverse change in the condition or business of the
Corporation from that known to the Stockholder at the time of its request for a
Registration and has withdrawn such request with reasonable promptness
following discovery by the Stockholder of that material adverse change, then
such Stockholder will not be required to pay any of the Registration Expenses.  For greater certainty, a withdrawal by a
Stockholder caused by a material adverse change in the condition, business or
prospect of the Corporation in respect of a Long-Form Registration, shall
not apply to reduce the number of remaining Long-Form Registrations
permitted under Section 2 (b).  All
Selling Expenses in connection with each Registration under  Section 2(a), Section 3 or Section 4 will be borne by the participating
Stockholders in proportion to the number of Registrable Shares sold by each
Stockholder relative to the total number of Registrable Shares sold pursuant to
the Registration. For greater
certainty, the Corporation will pay as part of the Registration Expenses the
fees and disbursements of one legal counsel chosen by the Stockholders
participating in the Registration. The fees and disbursements of any other
legal counsel retained individually by a Stockholder or a group of Stockholders
shall be borne by such Stockholders, as the case may be.

 

Section 8.               Rule 144
Reporting.

 

With a view to
making available to each Stockholder the benefits of Rule 144 and any
other rule or regulation of the Commission that may at any time permit a
Stockholder to sell securities of the Corporation to the public without
registration or pursuant to a Short-Form Registration, the Corporation
agrees to :

 

14

 

(a)                                  make and keep
public information available, as those terms are understood and defined in Rule 144,
at all times after 90 days after the effective date of the Corporation’s Initial
Registration so long as the Corporation remains subject to the periodic
reporting requirements under Sections 13 or 15(d) of the Exchange Act;

 

(b)                                 file with the
Commission in a timely manner all other reports and documents required of the
Corporation under the Exchange Act at any time after it has become subject to
such reporting requirements; and

 

(c)                                  so long as a
Stockholder owns any Registrable Shares, furnish to the Stockholder forthwith
upon written request a written statement by the Corporation as to its
compliance with the reporting requirements of Rule 144 (at any time from
and after 90 days following the effective date of the Corporation’s Initial
Registration provided the Corporation has become subject to such reporting
requirements), and of the Securities Act and the Exchange Act (at any time
after the Corporation has become subject to such reporting requirements), a
copy of the most recent annual or quarterly report of the Corporation, and such
other reports and documents so filed or other information as such Stockholder
may reasonably request in availing itself of any rule or regulation of the
Commission allowing such Stockholder to sell any such securities without
registration.

 

Section 9.               Canadian
Securities Law Requirements.

 

With a view to making available the benefits of certain rules and
regulations of any Canadian Securities Laws that may at any time permit the
sale of the Registrable Shares to the public without the filing of a
Prospectus, the Corporation agrees to use its best efforts to:

 

(a)                                  once a public
market exists in Canada for the shares of Common Stock, maintain a listing of
the shares of Common Stock on each Canadian stock exchange or quotation system
on which the shares of Common Stock were listed or quoted in connection with
the Initial Registration or subsequent Registration;

 

(b)                                 file with the
appropriate Canadian Securities Laws regulatory authorities in a timely manner
all reports and other documents required of the Corporation under Canadian
Securities Laws (at any time after the date that the Corporation becomes a
reporting issuer under Canadian Securities Laws); and

 

(c)                                  subject to the
terms of this Agreement, qualify the shares of Common Stock as freely tradeable
under any Prospectus filed by the Corporation or through a prospectus exemption
in accordance with applicable Canadian Securities Laws including in connection
with the Initial Registration.

 

Section 10.             Indemnification.

 

(a)                                  The Corporation
shall indemnify and hold harmless the holders of Registrable Shares, each
underwriter, broker or any other person acting on behalf of such holders of
Registrable Shares (including such holders’ directors, officers, employees,
partners, members, shareholders, legal counsels and agents) and each 

 

15

 

                                                other
person, if any, who controls any of the foregoing persons within the meaning of
the Securities Act (the “Investor Indemnified Parties”), to the fullest
extent permitted by law, from and against any losses, claims, damages or liabilities,
joint or several (or actions in respect thereof), to which the Investor
Indemnified Parties may be subject under any securities laws or otherwise,
insofar as those losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in the Prospectus under which such
Registrable Shares were registered under the Securities Act, any preliminary
Prospectus or final Prospectus contained therein or otherwise filed with the
Commission, any amendment or supplement thereto or any document incident to the
Registration of any Registrable Shares, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading in
light of the circumstances under which they were made, or any violation by the
Corporation of the Securities Act or state, any securities or blue sky laws
applicable to the Corporation and relating to action or inaction required of
the Corporation in connection with such registration or qualification under
such state securities or blue sky laws; and shall reimburse such Investor
Indemnified Parties for any reasonable legal or other expenses reasonably
incurred by any of them in connection with investigating or defending any such
loss, claim, damage, liability or action; provided, however, that
the Corporation shall not be liable in any such case to the extent that any such
loss, claim, damage, liability or action (including any legal or other expenses
incurred) arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in said Prospectus, amendment,
supplement or document incident to registration or qualification of any
Registrable Shares in reliance upon and in conformity with written information
furnished to the Corporation through an instrument duly executed by the holders
of Registrable Shares or their counsel or underwriter specifically for use
inclusion therein; provided  further, however, that the
foregoing indemnity agreement is subject to the condition that, insofar as it
relates to any untrue statement, alleged untrue statement, omission or alleged
omission made in any preliminary Prospectus but eliminated or remedied in the
final Prospectus, such indemnity agreement shall not inure to the benefit of
any Investor Indemnified Parties from whom the person asserting any loss,
claim, damage, liability or expense purchased the Restricted Shares which are
the subject thereof, if a copy of such final Prospectus had been made available
to such person and such Investor Indemnified Parties within a reasonable period
of time prior to the sale, and such final Prospectus was not delivered to such
person with or prior to the written confirmation of the sale of such
Registrable Shares to such person.

 

(b)                                 In connection with
any Registration of Registrable Shares under the Securities Act pursuant to
this Agreement, each holder of Registrable Shares shall severally and not
jointly indemnify and hold harmless (in the same manner and to the same extent
as set forth in Section 10(a)) the
Corporation, each director of the Corporation, each officer of the Corporation
who shall sign such registration statement, each underwriter, broker or any
other person acting on behalf of the holders of Registrable Shares and each
person who controls any of the foregoing 

 

16

 

                                                persons
within the meaning of the Securities Act (the “Corporation Indemnified
Parties”) against any losses, claims, damages or liabilities (or actions in
respect thereof), to which any of the foregoing persons may become subject
under the Securities Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
an untrue statement or alleged untrue statement of a material fact contained in
the registration statement under which such Registrable Shares were registered
under the Securities Act, any preliminary prospectus or final prospectus
contained therein or otherwise filed with the Commission, any amendment or
supplement thereto or any document incident to registration or qualification of
any Registrable Shares or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading in light of the
circumstances under which they were made, if such untrue statement, alleged
untrue statement, omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Corporation or such
underwriter through an instrument duly executed by the holders of Registrable
Shares or their counsel specifically for inclusion in such registration
statement, preliminary prospectus, final prospectus, amendment, supplement or
document; provided, however, that the maximum amount of liability
in respect of such indemnification shall be limited, in the case of each seller
of Registrable Shares, to an amount equal to the net proceeds actually received
by such seller from the sale of Registrable Shares effected pursuant to such
Registration.

 

(c)                                  Promptly after
receipt by an Investor Indemnified Party or a Corporation Indemnified Party, an
“Indemnified Party” of notice of the commencement of any action
involving a claim referred to in the Section
10(a) and Section
10(b), such Indemnified Party will, if a claim in respect
thereof may be made against an indemnifying party, give written notice to the
latter of the commencement of such action. 
The failure of any Indemnified Party to notify an indemnifying party of
any such action shall not (except to the extent such failure shall have an
adverse effect on the indemnifying party) relieve the indemnifying party from
any liability in respect of such action that it may have to such Indemnified
Party on account of this Section 10.  In case any such action is brought against an
Indemnified Party, the indemnifying party will be entitled to participate in
and to assume the defense thereof, jointly with any other indemnifying party
similarly notified to the extent that it may wish, with counsel reasonably
satisfactory to such Indemnified Party, and after notice from the indemnifying
party to such Indemnified Party of its election so to assume the defense
thereof, the indemnifying party shall not be responsible for any legal or other
expenses subsequently incurred by the Indemnified Party in connection with the
defense thereof; provided, however, that if any Indemnified Party
shall have reasonably concluded that there may be one or more legal or
equitable defenses available to such Indemnified Party which are additional to
or conflict with those available to the indemnifying party, or that such claim
or litigation involves or could have an effect upon matters beyond the scope of
the indemnity agreement provided in this Section
10, the indemnifying party shall not have the right to
assume the defense of such action on behalf of such Indemnified Party (but
shall have the right to participate therein with counsel 

 

17

 

                                                of its
choice) and such indemnifying party shall reimburse such Indemnified Party and
any person controlling such Indemnified Party for that portion of the fees and
expenses of any counsel retained by the Indemnified Party which is reasonably
related to the matters covered by the indemnity agreement provided in this Section 10.  If the
indemnifying party is not entitled to, or elects not to, assume the defense of
a claim, it will not be obligated to pay the fees and expenses of more than one
counsel with respect to such claim.

 

(d)                                 If the
indemnification provided for in this Section
10 is held by a court of competent jurisdiction to be
unavailable to an Indemnified Party with respect to any loss, claim, damage,
liability or action referred to herein, then the indemnifying party, in lieu of
indemnifying such Indemnified Party hereunder, shall contribute to the amounts
paid or payable by such Indemnified Party as a result of such loss, claim,
damage, liability or action in such proportion as is appropriate to reflect the
relative fault of the indemnifying party on the one hand and of the Indemnified
Party on the other in connection with the statements or omissions which
resulted in such loss, claim, damage, liability or action as well as any other
relevant equitable considerations.  The
relative fault of the indemnifying party and of the Indemnified Party shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by the indemnifying party
or by the Indemnified Party and the parties’ relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or
omission.  The parties agree that it
would not be just and equitable if contribution pursuant hereto were determined
by pro rata allocation or by any other
method or allocation which does not take account of the equitable
considerations referred to herein; provided, however, that the
maximum amount of liability in respect of indemnification under this paragraph
shall be limited, in the case of each holder of Registrable Shares, to an
amount equal to the net proceeds actually received by such seller from the sale
of Registrable Shares effected pursuant to such registration.  No person guilty of fraudulent misrepresentation
shall be entitled to contribution from any person.

 

Section 11.             Underwriting
Agreement.

 

Notwithstanding the provisions of Section
5, Section 6, Section 7 and Section 10, to the extent
that the Stockholders shall enter into an underwriting or similar agreement,
which agreement contains provisions covering one or more issues addressed in
such Sections, the provisions contained in such agreement addressing such issue
or issues shall control.

 

Section 12.             Information
by Holder.

 

The Stockholders
shall furnish to the Corporation such written information regarding the
Stockholders and the distribution proposed by any Stockholders as the
Corporation may reasonably request in writing and as shall be reasonably
required in connection with any registration, qualification or compliance
referred to in this Agreement.

 

18

 

Section 13.             No
Conflict of Rights; Future Rights.

 

The Corporation
shall not, after the date hereof, grant any Registration rights which are
superior to, or that will conflict with, the rights granted to the Series A
Investors or the Series C Investors hereunder without the consent of the
holders of sixty six and two thirds percent (66 2/3%) of the Preferred
Registrable Shares then outstanding.

 

Section 14.             Termination.

 

This Agreement
shall terminate and be of no further force or effect on the first to occur of (i) five
years after the date of Initial Registration; (ii) when there shall no
longer be any Registrable Shares outstanding, or (iii) as to any
Stockholder, when all of the Registrable Shares held by such Stockholder may be
disposed of within any 90 day period under Rule 144 under the Securities
Act.

 

Section 15.             Benefits
of Agreement; Third Party Beneficiary.

 

This Agreement
shall bind and inure to the benefit of the Corporation, the Stockholders and
subject to Section 16, the respective
successors and assigns of the Corporation and the Stockholders.  The managing underwriter(s) of the
Initial Offering are intended third party beneficiaries of the agreements of
the Corporation and the Stockholders contained in Section
5.

 

Section 16.             Assignment.

 

Each Stockholder may assign its rights hereunder to any purchaser or
transferee of at least 75,000 Registrable Shares (appropriately adjusted for
stock splits, stock dividends, combinations, reverse splits, reclassification
or similar events); provided, however, that the transferor shall
provide prior written notice thereof to the Corporation and such purchaser or
transferee shall, as a condition to the effectiveness of such assignment, be
required to execute a counterpart to this Agreement agreeing to be treated as a
Series A Investor, Series C Investor or a Prior Stockholder (as the
case may be) whereupon such purchaser or transferee shall have the benefits of,
and shall be subject to the restrictions contained in, this Agreement as if
such purchaser or transferee was originally included in the definition of a Series A
Investor, Series C Investor or a Prior Stockholder (as the case may be)
herein and had originally been a party hereto.

 

Section 17.             Entire
Agreement.

 

This Agreement, and
the other writings referred to herein or delivered pursuant hereto, contain the
entire agreement among the Stockholders and the Corporation with respect to the
subject matter hereof and supersede all prior and contemporaneous arrangements
or understandings with respect thereto.

 

19

 

Section 18.             Notices.

 

All notices,
requests, consents and other communications hereunder to any party shall be
deemed to be sufficient if contained in a written instrument delivered in
person or sent by telecopy (provided that the receipt of successful facsimile
transmission is received by the sender), nationally-recognized overnight
courier or first class registered or certified mail, return receipt requested,
postage prepaid, addressed to such party at the address set forth below or such
other address as may hereafter be designated in writing by such party to the
other parties:

 

(a)                                  If to
the Corporation:

 

Nexsan Corporation

21700 Oxnard Street

Suite 1850

Woodland Hills, CA 91367

 

Telephone: 818-715-9111

Facsimile:  818-936-0159

Attention:  Chief Executive Officer

 

(b)                                 with a copy to:

 

Sonnenschein Nath & Rosenthal LLP

1221 Avenue of the Americas

New York, New York 10020

 

Telephone: (212)
768-6700

Facsimile:  (212) 768-6800

Attention:  Denise Tormey, Esq.

 

(c)                                  if to the
Stockholders, to their respective addresses set forth on Schedule I,  Schedule II, Schedule III or Schedule
IV hereto.

 

All such notices, requests, consents and other communications shall be
deemed to have been delivered (a) in the case of personal delivery or
delivery by telecopy (provided that the receipt of
successful facsimile transmission is received by the sender), on the date of such delivery, (b) in the
case of dispatch by nationally-recognized overnight courier, on the next
Business Day following such dispatch and (c) in the case of mailing, on
the fifth Business Day after the posting thereof.

 

Section 19.             Modifications;
Amendments; Waivers.

 

The terms and
provisions of this Agreement may not be modified or amended, nor may any
provision be waived, except pursuant to a writing signed by (i) the
Corporation, (ii) the holders of Prior Common Registrable Shares and the
holders of Preferred Registrable Shares holding in the aggregate not less than
a majority of the Registrable Shares then outstanding and (iii) the
holders of Preferred Registrable Shares holding in the aggregate not less than
sixty six and two thirds percent (66 2/3%) of
the Preferred Registrable Shares then outstanding.  No waiver of any right granted to any party
hereto shall be effective, or be deemed to be effective, against such party
without such party’s express written consent.

 

20

 

Section 20.             Counterparts;
Facsimile Signatures.

 

This Agreement may
be executed in any number of original or facsimile counterparts, and each such
counterpart hereof shall be deemed to be an original instrument, but all such
counterparts together shall constitute but one agreement.

 

Section 21.             Headings.

 

The headings of the various sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed to be a part
of this Agreement.

 

Section 22.             Governing
Law.

 

This Agreement
shall be governed by and construed in accordance with the domestic laws of the
State of New York, without giving effect to any law or rule that would
cause the laws of any jurisdiction other than the State of New York to be
applied.  In the event of any dispute
arising out of or relating to this Agreement, then such dispute shall be
resolved solely and exclusively by confidential binding arbitration with the
New York branch of JAMS (“JAMS”) to be governed by JAMS’ Commercial Rules of
Arbitration (the “JAMS Rules”) and heard before one arbitrator.  The parties shall attempt to mutually select
the arbitrator.  In the event they are
unable to mutually agree, the arbitrator shall be selected by the procedures
prescribed by the JAMS Rules.  Each party
shall bear its own attorneys’ fees, expert witness fees, and costs incurred in
connection with any arbitration.

 

Section 23.             [Intentionally
Deleted]

 

Section 24.             Termination
of the Second Amended and Restated Registration Agreement.

 

Upon the execution
and delivery of this Agreement, the Second Amended and Restated Registration
Agreement shall be deemed terminated in its entirety and cease to be of any
force or effect.

 

21

 

IN
WITNESS WHEREOF, the parties hereto have
executed this Third Amended and Restated Registration Rights Agreement on the
date first written above.

 

	
   

  	
  NEXSAN CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Philip Black

  
	
   

  	
   

  	
  Name: Philip Black

  
	
   

  	
   

  	
  Title: President and CEO

  

 

 

 

[Series C Investors Signature Pages Follow]

 

S-1

 

SERIES C INVESTORS

 

	
   

  	
  LE FONDS DE SOLIDARITÉ DES

  TRAVAILLEURS DU QUÉBEC (F.T.Q.)

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jacques Bernier

  
	
   

  	
   

  	
  Name: Jacques Bernier

  
	
   

  	
   

  	
  Title: Senior Vice President

  
	
   

  	
   

  	
  Int. Tech. Telecon. And Ind. Innov.

  

 

 

 

[Series A Investors Signature Pages Follow]

 

S-2

 

SERIES A INVESTORS

 

	
   

  	
  VANTAGEPOINT VENTURE PARTNERS

  IV (Q), L.P.

  
	
   

  	
  By: VantagePoint Venture Associates IV,

  L.L.C., its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Alan E. Salzman

  
	
   

  	
   

  	
  Name: Alan E. Salzman

  
	
   

  	
   

  	
  Title: Managing Member

  

 

	
   

  	
  VANTAGEPOINT VENTURE PARTNERS

  IV, L.P.

  
	
   

  	
  By: VantagePoint Venture Associates IV,

  L.L.C., its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Alan E. Salzman

  
	
   

  	
   

  	
  Name: Alan E. Salzman

  
	
   

  	
   

  	
  Title: Managing Member

  

 

	
   

  	
  VANTAGEPOINT VENTURE PARTNERS

  IV PRINCIPALS FUND, L.P.

  
	
   

  	
  By: VantagePoint Venture Associates IV,

  L.L.C., its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Alan E. Salzman

  
	
   

  	
   

  	
  Name: Alan E. Salzman

  
	
   

  	
   

  	
  Title: Managing Member

  

 

 

 

[Additional Series A Investors Signature Pages Follow]

 

S-3

 

	
   

  	
  RRE VENTURES III, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Andrew Zalasin

  
	
   

  	
   

  	
  Name: Andrew Zalasin

  
	
   

  	
   

  	
  Title: General Partner

  

 

	
   

  	
  RRE VENTURES III, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Andrew Zalasin

  
	
   

  	
   

  	
  Name: Andrew Zalasin

  
	
   

  	
   

  	
  Title: General Partner

  

 

	
   

  	
  RRE VENTURES III-A, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Andrew Zalasin

  
	
   

  	
   

  	
  Name: Andrew Zalasin

  
	
   

  	
   

  	
  Title: General Partner

  

 

	
   

  	
  FIRST GEN-E-SERVICIOS DE CONSULTORIA SA

  
	
   

  	
  By: Gen-e Management Ltd.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Domenico Grassi

  
	
   

  	
   

  	
  Name: Domenico Grassi

  
	
   

  	
   

  	
  Title:

  

 

 

 

[Prior Stockholders Signature Pages Follow]

 

S-4

 

PRIOR STOCKHOLDERS:

 

FOR INDIVIDUALS:

 

	
   

  	
  Martin Boddy

  
	
   

  	
  Print Name

  
	
   

  	
   

  
	
   

  	
  /s/ Martin Boddy

  
	
   

  	
  Signature

  

 

	
   

  	
  James Molenda

  
	
   

  	
  Print Name

  
	
   

  	
   

  
	
   

  	
  /s/ James Molenda

  
	
   

  	
  Signature

  

 

	
   

  	
  Giovanni Saladino

  
	
   

  	
  Print Name

  
	
   

  	
   

  
	
   

  	
  /s/ Giovanni Saladino

  
	
   

  	
  Signature

  

 

	
   

  	
  Don A. Sanders

  
	
   

  	
  Print Name

  
	
   

  	
   

  
	
   

  	
  /s/ Don A. Sanders

  
	
   

  	
  Signature

  

 

	
   

  	
  Katherine U. Sanders

  
	
   

  	
  Print Name

  
	
   

  	
   

  
	
   

  	
  /s/ Katherine U. Sanders

  
	
   

  	
  Signature

  

 

S-5

 

	
   

  	
  Gary Watson

  
	
   

  	
  Print Name

  
	
   

  	
   

  
	
   

  	
  /s/ Gary Watson

  
	
   

  	
  Signature

  

 

	
   

  	
  Don Weir & Julie Ellen Weir

  
	
   

  	
  Print Name

  
	
   

  	
   

  
	
   

  	
  /s/ Don Weir &
  Julie Weir

  
	
   

  	
  Signature

  

 

FOR CORPORATIONS:

 

	
   

  	
  Ledgewood Properties, Inc. Profit Sharing Plan

  
	
   

  	
  Name of Company

  
	
   

  	
   

  
	
   

  	
  Jeffrey B. Hanson, Trustee

  
	
   

  	
  Name of Officer of Company

  
	
   

  	
   

  
	
   

  	
  /s/ Jeffrey B. Hanson

  
	
   

  	
  Signature of Officer

  

 

FOR PARTNERSHIPS:

 

	
   

  	
  Beechtree Capital LLC

  
	
   

  	
  Name of Partnership

  
	
   

  	
   

  
	
   

  	
  /s/ George Weiss

  
	
   

  	
  Signature of Authorized Partner

  

 

	
   

  	
  CDLM Investments Ltd.

  
	
   

  	
  Name of Partnership

  
	
   

  	
   

  
	
   

  	
  /s/ George Weiss

  
	
   

  	
  Signature of Authorized Partner

  

 

S-6

 

	
   

  	
  CDLM — Weiss Associates

  
	
   

  	
  Name of Partnership

  
	
   

  	
   

  
	
   

  	
  /s/ George Weiss

  
	
   

  	
  Signature of Authorized Partner

  

 

	
   

  	
  DLG Investment Partnership

  
	
   

  	
  Name of Partnership

  
	
   

  	
   

  
	
   

  	
  /s/ George Weiss

  
	
   

  	
  Signature of Authorized Partner

  

 

	
   

  	
  Sanders Opportunity Fund, LP

  
	
   

  	
  Name of Partnership

  
	
   

  	
   

  
	
   

  	
  /s/ Don A. Sanders

  
	
   

  	
  Signature of Authorized Partner 

  

 

	
    

  	
  Sanders Opportunity Fund (Inst), LP 

  
	
   

  	
  Name of Partnership

  
	
   

  	
   

  
	
   

  	
  /s/ Don A. Sanders

  
	
   

  	
  Signature of Authorized Partner 

  

 

	
   

  	
  Weir Holdings LP 

  
	
   

  	
  Name of Partnership

  
	
   

  	
   

  
	
   

  	
  /s/ Donald Weir

  
	
   

  	
  Signature of Authorized Partner

  

 

S-7

 

FOR TRUSTS:

 

	
   

  	
   

  
	
   

  	
  Name of Trust

  
	
   

  	
   

  
	
   

  	
  Name of Authorized Trustee

  
	
   

  	
   

  
	
   

  	
  Signature of Authorized Trustee

  

 

S-8

 

 

 

AMENDMENT TO THIRD AMENDED AND
RESTATED REGISTRATION RIGHTS AGREEMENT

 

                This Amendment to
Third Amended and Restated Registration Rights Agreement (the “Amendment”)
is entered into, as of November 14, 2007, by and among Nexsan Corporation,
a Delaware corporation (the “Corporation”), and the stockholders of the
Corporation who are a party hereto.  
Unless otherwise specifically defined herein, all capitalized terms used
in this Amendment shall have the meaning ascribed thereto in the Registration
Rights Agreement (as defined below).

 

                WHEREAS, the
Company, the Prior Stockholders, the Other Rights Holders, the Series A
Investors and Series C Investors are parties to a certain Third Amended
and Restated Registration Rights Agreement, dated as of March 29, 2007
(the “Registration Rights Agreement”);

 

                WHEREAS, the
parties hereto desire to amend the Registration Rights Agreement as provided
herein to, among other things, clarify certain rights relating to the
Acquisition  Stockholders; and

 

                WHEREAS, Section 19
of the Registration Rights Agreement provides that the Registration Rights
Agreement may be amended pursuant to a writing signed by
(i) the Corporation, (ii) the holders of Prior Common Registrable
Shares and the holders of Preferred Registrable Shares holding in the aggregate
not less than a majority of the Registrable Shares then outstanding and (iii) the
holders of Preferred Registrable Shares holding in the aggregate not less than
sixty six and two thirds percent (66 2/3%) of
the Preferred Registrable Shares then outstanding.

 

                NOW, THEREFORE, in
consideration of the foregoing premises and covenants and promises set forth
herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:

 

1.  Amendments.  The Registrations Rights Agreement is hereby
amended as follows:

 

                (A)  Under Section 1
(Definitions) of the Registration Rights Agreement, the defined term “Acquisition
Stockholder” is hereby amended by deleting this definition in its entirety and
inserting in lieu thereof the following:

 

“Acquisition Stockholders” means those Persons
who own Common Stock or securities convertible into or exchangeable for Common
Stock which were acquired in connection with the acquisition by the Corporation
of AESign Evertrust Inc., a company incorporated federally under the Canada
Business Corporations Act (now known as Nexsan Technologies Canada Inc.).

 

                (B)  Under Section 1
(Definitions) of the Registration Rights Agreement, the defined term “Prior
Common Registrable Shares” shall be amended by inserting the following sentence
at the end of this defined term:

 

 

 

“Shares of Common Stock issued or issuable upon
redemption of the Exchangeable Shares issued by 6360319 Canada Inc. to Thomas
F. Gosnell shall also be deemed to be Prior Common Registrable Shares.”

 

2.   Effective Date. This
Amendment shall become effective without any further action on the date on
which the Company shall have received counterparts hereof duly executed by
necessary parties as required under Section 19 of the Registration Rights
Agreement.

 

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

 

4.  Counterparts.  This Amendment may be executed
in any number of original or facsimile counterparts, and each such counterpart
hereof shall be deemed to be an original instrument, but all such counterparts
together shall constitute but one agreement.

 

5.  Governing Law.  This Amendment shall be governed by and
construed in accordance with the domestic laws of the State of New York,
without giving effect to any law or rule that would cause the laws of any
jurisdiction other than the State of New York to be applied.

 

[The remainder of this page intentionally left blank]

 

2

 

                IN WITNESS
WHEREOF, the parties hereto have executed this Amendment to Third Amended and
Restated Registration Rights Agreement as of the date and year first above
written.

 

	
   

  	
  NEXSAN CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Philip Black

  
	
   

  	
  Name:

  	
  Philip Black

  
	
   

  	
  Title:

  	
  President

  

 

3

 

[Signature Page to Amendment to Third Amended and Restated
Registration Rights Agreement]

 

	
   

  	
  Stockholder:

  
	
   

  	
   

  
	
   

  	
  BEECHTREE CAPITAL LLC

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ George Weiss

  
	
   

  	
   

  	
  Name: George Weiss

  
	
   

  	
   

  	
  Title: Managing Member

  
	
   

  	
   

  
	
   

  	
  1,656,279

  
	
   

  	
  Number
  of Shares of Common Stock

  
	
   

  	
   

  
	
   

  	
  0

  
	
   

  	
  Number
  of Shares of Series A Preferred Stock

  
	
   

  	
   

  
	
   

  	
  284,647

  
	
   

  	
  Number
  of Shares of Series C Preferred Stock

  

 

 

 

[Signature Page to Amendment to Third Amended
and Restated Registration Rights Agreement]

 

	
   

  	
  Stockholder:

  
	
   

  	
   

  
	
   

  	
  CDLM-WEISS ASSOCIATES

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ George Weiss

  
	
   

  	
  Name:

  	
  George Weiss

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  2,425,226

  
	
   

  	
  Number
  of Shares of Common Stock

  
	
   

  	
   

  
	
   

  	
  0

  
	
   

  	
  Number
  of Shares of Series A Preferred Stock

  
	
   

  	
   

  
	
   

  	
  0

  
	
   

  	
  Number
  of Shares of Series C Preferred Stock

  

 

 

 

[Signature Page to Amendment to Third Amended
and Restated Registration Rights Agreement]

 

	
   

  	
  Stockholder:

  
	
   

  	
   

  
	
   

  	
  DLG INVESTMENT PARTNERSHIP

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ George Weiss

  
	
   

  	
  Name:

  	
  George Weiss

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  674,443

  
	
   

  	
  Number
  of Shares of Common Stock

  
	
   

  	
   

  
	
   

  	
  179,585

  
	
   

  	
  Number
  of Shares of Series A Preferred Stock

  
	
   

  	
   

  
	
   

  	
  0

  
	
   

  	
  Number
  of Shares of Series C Preferred Stock

  

 

 

 

[Signature Page to Amendment to Third Amended and Restated
Registration Rights Agreement]

 

	
   

  	
  Stockholder:

  
	
   

  	
   

  
	
   

  	
  FIRST GEN-E — SERVICOS DE CONSULTORIA SA

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Domenico Grassi

  
	
   

  	
  Name:

  	
  Domenico Grassi

  
	
   

  	
  Title:

  	
  Manager

  
	
   

  	
   

  
	
   

  	
  15,743,596

  
	
   

  	
  Number
  of Shares of Common Stock

  
	
   

  	
   

  
	
   

  	
  7,196,889

  
	
   

  	
  Number
  of Shares of Series A Preferred Stock

  
	
   

  	
   

  
	
   

  	
  2,491,064

  
	
   

  	
  Number
  of Shares of Series C Preferred Stock

  

 

 

 

[Signature Page to Amendment to Third Amended and Restated
Registration Rights Agreement]

 

	
   

  	
  Stockholder:

  
	
   

  	
   

  
	
   

  	
  RRE VENTURES FUND III, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Andrew Zalasin

  
	
   

  	
  Name:

  	
  Andrew Zalasin

  
	
   

  	
  Title:

  	
  General Partner

  
	
   

  	
   

  
	
   

  	
  0

  
	
   

  	
  Number
  of Shares of Common Stock

  
	
   

  	
   

  
	
   

  	
  559,507

  
	
   

  	
  Number
  of Shares of Series A Preferred Stock

  
	
   

  	
   

  
	
   

  	
  88,406

  
	
   

  	
  Number
  of Shares of Series C Preferred Stock

  

 

 

 

[Signature Page to Amendment to Third Amended and Restated
Registration Rights Agreement]

 

	
   

  	
  Stockholder:

  
	
   

  	
   

  
	
   

  	
  RRE VENTURES III, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Andrew Zalasin

  
	
   

  	
  Name:

  	
  Andrew Zalasin

  
	
   

  	
  Title:

  	
  General Partner

  
	
   

  	
   

  
	
   

  	
  0

  
	
   

  	
  Number
  of Shares of Common Stock

  
	
   

  	
   

  
	
   

  	
  308,114

  
	
   

  	
  Number
  of Shares of Series A Preferred Stock

  
	
   

  	
   

  
	
   

  	
  48,683

  
	
   

  	
  Number
  of Shares of Series C Preferred Stock

  

 

 

 

[Signature Page to Amendment to Third Amended and Restated
Registration Rights Agreement]

 

	
   

  	
  Stockholder:

  
	
   

  	
   

  
	
   

  	
  RRE VENTURES III-A, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Andrew Zalasin

  
	
   

  	
  Name:

  	
  Andrew Zalasin

  
	
   

  	
  Title:

  	
  General Partner

  
	
   

  	
   

  
	
   

  	
  0

  
	
   

  	
  Number
  of Shares of Common Stock

  
	
   

  	
   

  
	
   

  	
  6,695,372

  
	
   

  	
  Number
  of Shares of Series A Preferred Stock

  
	
   

  	
   

  
	
   

  	
  1,057,909

  
	
   

  	
  Number
  of Shares of Series C Preferred Stock

  

 

 

 

 

 

[Signature Page to Amendment to Third Amended and Restated
Registration Rights Agreement]

 

	
   

  	
  Stockholder:

  
	
   

  	
   

  
	
   

  	
  VANTAGEPOINT VENTURE PARTNERS IV (Q), L.P.

  
	
   

  	
  By:

  	
  VantagePoint Venture Associates IV, L.L.C.,

  
	
   

  	
   

  	
  its general

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Alan E. Salzman

  
	
   

  	
  Name:

  	
  Alan E. Salzman

  
	
   

  	
  Title:

  	
  Managing Member

  
	
   

  	
   

  
	
   

  	
  0

  
	
   

  	
  Number
  of Shares of Common Stock

  
	
   

  	
   

  
	
   

  	
  22,837,719

  
	
   

  	
  Number
  of Shares of Series A Preferred Stock

  
	
   

  	
   

  
	
   

  	
  3,596,901

  
	
   

  	
  Number
  of Shares of Series C Preferred Stock

  
				

 

 

 

 

[Signature Page to Amendment to Third Amended and Restated
Registration Rights Agreement]

 

	
   

  	
  Stockholder:

  
	
   

  	
   

  
	
   

  	
  VANTAGEPOINT VENTURE PARTNERS IV PRINCIPALS

  FUND, L.P.

  
	
   

  	
  By:

  	
  VantagePoint Venture Associates IV, L.L.C.,

  
	
   

  	
   

  	
  its general

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Alan E. Salzman

  
	
   

  	
  Name:

  	
  Alan E. Salzman

  
	
   

  	
  Title:

  	
  Managing Member

  
	
   

  	
   

  
	
   

  	
  0

  
	
   

  	
  Number
  of Shares of Common Stock

  
	
   

  	
   

  
	
   

  	
  83,193

  
	
   

  	
  Number
  of Shares of Series A Preferred Stock

  
	
   

  	
   

  
	
   

  	
  13,103

  
	
   

  	
  Number
  of Shares of Series C Preferred Stock

  
				

 

 

 

[Signature Page to Amendment to Third Amended and Restated
Registration Rights Agreement]

 

	
   

  	
  Stockholder:

  
	
   

  	
   

  
	
   

  	
  VANTAGEPOINT VENTURE PARTNERS IV, L.P.

  
	
   

  	
  By:

  	
  VantagePoint Venture Associates IV, L.L.C.,

  
	
   

  	
   

  	
  its general

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Alan E. Salzman

  
	
   

  	
  Name:

  	
  Alan E. Salzman

  
	
   

  	
  Title:

  	
  Managing Member

  
	
   

  	
   

  
	
   

  	
  0

  
	
   

  	
  Number
  of Shares of Common Stock

  
	
   

  	
   

  
	
   

  	
  2,289,066

  
	
   

  	
  Number
  of Shares of Series A Preferred Stock

  
	
   

  	
   

  
	
   

  	
  360,088

  
	
   

  	
  Number
  of Shares of Series C Preferred Stock

  
				

 

 

 

[Signature Page to Amendment to Third Amended and Restated
Registration Rights Agreement]

 

	
   

  	
  Stockholder:

  
	
   

  	
   

  
	
   

  	
  FONDS DE SOLIDARITÉ DES TRAVAILLEURS DU QUÉBEC (F.T.Q.)

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jacques Bernier

  
	
   

  	
  Name:

  	
  Jacques Bernier

  
	
   

  	
  Title:

  	
  Senior Vice President Inf. Tech. Telecom. And Ind. Innnov.

  
	
   

  	
   

  
	
   

  	
  0

  
	
   

  	
  Number
  of Shares of Common Stock

  
	
   

  	
   

  
	
   

  	
  0

  
	
   

  	
  Number
  of Shares of Series A Preferred Stock

  
	
   

  	
   

  
	
   

  	
  15,000,000

  
	
   

  	
  Number of Shares of
  Series C Preferred Stock

  

 

 

 

[Signature Page to Amendment to Third Amended and Restated
Registration Rights Agreement]

 

	
   

  	
  Stockholder:

  
	
   

  	
   

  
	
   

  	
  /s/ Thomas F. Gosnell

  
	
   

  	
  THOMAS F. GOSNELL

  
	
   

  	
   

  
	
   

  	
  0

  
	
   

  	
  Number
  of Shares of Common Stock

  
	
   

  	
   

  
	
   

  	
  0

  
	
   

  	
  Number
  of Shares of Series A Preferred Stock

  
	
   

  	
   

  
	
   

  	
  1

  
	
   

  	
  Number
  of Shares of Series B Preferred Stock

  
	
   

  	
   

  
	
   

  	
  0

  
	
   

  	
  Number of Shares of
  Series C Preferred Stock

  

 

 

 

[Signature Page to Amendment to Third Amended and Restated
Registration Rights Agreement]

 

	
   

  	
  Stockholder:

  
	
   

  	
   

  
	
   

  	
  /s/ Martin Boddy

  
	
   

  	
  MARTIN BODDY

  
	
   

  	
   

  
	
   

  	
  4,354,503

  
	
   

  	
  Number
  of Shares of Common Stock

  
	
   

  	
   

  
	
   

  	
  0

  
	
   

  	
  Number
  of Shares of Series A Preferred Stock

  
	
   

  	
   

  
	
   

  	
  0

  
	
   

  	
  Number
  of Shares of Series C Preferred Stock

  

 

 

 

[Signature Page to Amendment to Third Amended and Restated
Registration Rights Agreement]

 

	
   

  	
  Stockholder:

  
	
   

  	
   

  
	
   

  	
  LEDGEWOOD
  PROPERTIES, INC. PROFIT SHARING PLAN

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeffrey Hanson

  
	
   

  	
  Name:

  	
  Jeffrey Hanson

  
	
   

  	
  Title:

  	
  Trustee

  
	
   

  	
   

  
	
   

  	
  827,439

  
	
   

  	
  Number
  of Shares of Common Stock

  
	
   

  	
   

  
	
   

  	
  118,370

  
	
   

  	
  Number
  of Shares of Series A Preferred Stock

  
	
   

  	
   

  
	
   

  	
  243,222

  
	
   

  	
  Number
  of Shares of Series C Preferred Stock

  

 

 

 

[Signature Page to Amendment to Third Amended and Restated
Registration Rights Agreement]

 

	
   

  	
  Stockholder:

  
	
   

  	
   

  
	
   

  	
  SANDERS
  OPPORTUNITY FUND, LP

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Don A. Sanders

  
	
   

  	
  Name:

  	
  Don A. Sanders

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  135,716

  
	
   

  	
  Number
  of Shares of Common Stock

  
	
   

  	
   

  
	
   

  	
  148,367

  
	
   

  	
  Number
  of Shares of Series A Preferred Stock

  
	
   

  	
   

  
	
   

  	
  116,195

  
	
   

  	
  Number
  of Shares of Series C Preferred Stock

  

 

 

 

[Signature Page to Amendment to Third Amended and Restated
Registration Rights Agreement]

 

	
   

  	
  Stockholder:

  
	
   

  	
   

  
	
   

  	
  SANDERS
  OPPORTUNITY FUND (INST), LP

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Don A. Sanders

  
	
   

  	
  Name:

  	
  Don A. Sanders

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  483,532

  
	
   

  	
  Number
  of Shares of Common Stock

  
	
   

  	
   

  
	
   

  	
  427,925

  
	
   

  	
  Number
  of Shares of Series A Preferred Stock

  
	
   

  	
   

  
	
   

  	
  370,995

  
	
   

  	
  Number
  of Shares of Series C Preferred Stock

  

 

 

 

[Signature Page to Amendment to Third Amended and Restated
Registration Rights Agreement]

 

	
   

  	
  Stockholder:

  
	
   

  	
   

  
	
   

  	
  /s/ Don A. Sanders

  
	
   

  	
  DON A. SANDERS

  
	
   

  	
   

  
	
   

  	
  540,699

  
	
   

  	
  Number
  of Shares of Common Stock

  
	
   

  	
   

  
	
   

  	
  516,197

  
	
   

  	
  Number
  of Shares of Series A Preferred Stock

  
	
   

  	
   

  
	
   

  	
  487,190

  
	
   

  	
  Number
  of Shares of Series C Preferred Stock

  

 

 

 

[Signature Page to Amendment to Third Amended and Restated
Registration Rights Agreement]

 

	
   

  	
  Stockholder:

  
	
   

  	
   

  
	
   

  	
  /s/ Katherine U. Sanders

  
	
   

  	
  KATHERINE U. SANDERS

  
	
   

  	
   

  
	
   

  	
  184,818

  
	
   

  	
  Number
  of Shares of Common Stock

  
	
   

  	
   

  
	
   

  	
  89,792

  
	
   

  	
  Number
  of Shares of Series A Preferred Stock

  
	
   

  	
   

  
	
   

  	
  243,595

  
	
   

  	
  Number
  of Shares of Series C Preferred Stock

  

 

 

 

[Signature Page to Amendment to Third Amended and Restated
Registration Rights Agreement]

 

	
   

  	
  Stockholder:

  
	
   

  	
   

  
	
   

  	
  DON
  WEIR & JULIE ELLEN WEIR JT TEN

  
	
   

  	
   

  
	
   

  	
  /s/ Don Weir

  
	
   

  	
  Don Weir

  
	
   

  	
   

  
	
   

  	
  /s/ Julie Ellen Weir

  
	
   

  	
  Julie Ellen Weir

  
	
   

  	
   

  
	
   

  	
  178,571

  
	
   

  	
  Number
  of Shares of Common Stock

  
	
   

  	
   

  
	
   

  	
  60,200

  
	
   

  	
  Number
  of Shares of Series A Preferred Stock

  
	
   

  	
   

  
	
   

  	
  243,595

  
	
   

  	
  Number
  of Shares of Series C Preferred Stock

  

 

 

 

[Signature Page to Amendment to Third Amended and Restated
Registration Rights Agreement]

 

	
   

  	
  Stockholder:

  
	
   

  	
   

  
	
   

  	
  WEIR
  HOLDINGS LP

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Donald Weir

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  27,845

  
	
   

  	
  Number
  of Shares of Common Stock

  
	
   

  	
   

  
	
   

  	
  131,897

  
	
   

  	
  Number
  of Shares of Series A Preferred Stock

  
	
   

  	
   

  
	
   

  	
  0

  
	
   

  	
  Number
  of Shares of Series C Preferred Stock

  

 

 

 

 

 

SECOND AMENDMENT TO THIRD AMENDED
AND RESTATED REGISTRATION RIGHTS AGREEMENT

 

                This Second
Amendment to Third Amended and Restated Registration Rights Agreement (the “Amendment”)
is entered into, as of December 31, 2007 by and among Nexsan Corporation,
a Delaware corporation (the “Corporation”), and the stockholders of the
Corporation who are a party hereto.  
Unless otherwise specifically defined herein, all capitalized terms used
in this Amendment shall have the meaning ascribed thereto in the Registration
Rights Agreement (as defined below).

 

                WHEREAS, the
Corporation, the Prior Stockholders, the Other Rights Holders, the Series A
Investors and Series C Investors are parties to a certain Third Amended
and Restated Registration Rights Agreement, dated as of March 29, 2007, as
amended by the Amendment to the Third Amended and Restated Registration Rights
Agreement, dated November 14, 2007 (the “Registration Rights Agreement”);

 

                WHEREAS, the Corporation is planning an underwritten
initial public offering of its Common Stock (the “Offering”) pursuant to a
registration statement to be filed with the U.S. Securities and Exchange
Commission;

 

                WHEREAS,
in connection with the Offering, and as an inducement for the Corporation and the representatives of
the investment banks that are underwriting the Offering to continue their
efforts in connection with the Offering, the stockholders of the Corporation
are requested to amend the Registration Rights
Agreement as provided herein; and

 

                WHEREAS, Section 19
of the Registration Rights Agreement provides that the Registration Rights
Agreement may be amended pursuant to a writing signed by
(i) the Corporation, (ii) the holders of Prior Common Registrable
Shares and the holders of Preferred Registrable Shares holding in the aggregate
not less than a majority of the Registrable Shares then outstanding and (iii) the
holders of Preferred Registrable Shares holding in the aggregate not less than
sixty six and two thirds percent (66 2/3%) of
the Preferred Registrable Shares then outstanding.

 

                NOW, THEREFORE, in
consideration of the foregoing premises and covenants and promises set forth
herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

 

1.  Amendments.  The Registration Rights Agreement is hereby
amended as follows:

 

                (A)  Section 3(a) of
the Registration Rights Agreement is hereby amended by deleting this section in
its entirety and inserting in lieu thereof the following:

 

(a)                                  If, at any time after the date on which the
Corporation has consummated an Initial Registration, the
Corporation proposes for any reason to Register Primary Shares under the
Securities Act and/or the Canadian Securities Laws, it shall give written
notice to the Stockholders of its intention to so Register such Primary Shares
at least thirty (30) days before the initial filing of the registration
statement and, upon the written request, delivered to the Corporation within
twenty (20) days after delivery of any such 

 

 

 

                                                notice
by the Corporation, of the Stockholders to include in such Registration of
Registrable Shares (which request shall specify the number of Registrable
Shares proposed to be included in such Registration and shall state that such
Stockholders desire to sell such Registrable Shares in the public securities
markets), the Corporation shall use its best efforts to cause all such
Registrable Shares to be included in such Registration on the same terms and
conditions as the securities otherwise being sold in such Registration; provided,
however, that if the managing underwriter, if any, advises the
Corporation that the inclusion of all Registrable Shares requested to be
included in such Registration would be materially detrimental to the successful
marketing (including pricing) of the Primary Shares proposed to be included in
such Registration, then the number of Primary Shares and Registrable Shares
proposed to be included in such Registration shall be included in the following
order:

 

(i)            first, the Primary Shares; and

 

(ii)                                  second, the
Preferred Registrable Shares and the Prior Common Registrable Shares requested
to be included in such Registration  pro rata among the holders thereof based on the number of
Registrable Shares requested to be included in such Registration by each such
holder.

 

                (B) Section 3(b) of the
Registration Rights Agreement is hereby amended by deleting this section in its
entirety and inserting in lieu thereof the following:

 

(b)  For the purposes of cutbacks pursuant to this Section 3,
in no event shall the aggregate amount of the Registrable Shares held by the Series C
Investors and Series A Investors included in the Registration be reduced
below 20% of the aggregate amount of securities included in such
Registration.  In the event the
Registrable Shares held by the Series C Investors and the Series A
Investors is so limited to 20% as set forth in this Section 3(b), then no
other Stockholder shall be allowed to sell any Registrable Shares in such
Registration.

 

(C) Section 5 of the Registration Rights Agreement is
hereby amended by adding the sentence set forth below to the end of Section 5:

 

Notwithstanding anything
to the contrary stated in this Section 5, neither the Corporation or the
underwriters shall be prohibited or restricted in any way from permitting
certain shares of the Corporation held by one or more stockholders from being
registered and sold in the Initial Registration, nor shall any of the
obligations of any Series A Investor, Series C Investor or Prior
Stockholder under this Section 5 be waived or terminated as a result of
any shares held by one or more stockholders of the Corporation being registered
and sold in the Initial Registration.

 

2

 

2.  Effective Date. This
Amendment shall become effective without any further action on the date on
which the Corporation shall have received counterparts hereof duly executed by
necessary parties as required under Section 19 of the Registration Rights
Agreement.

 

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

 

4.  Counterparts.  This Amendment may be executed
in any number of original or facsimile counterparts, and each such counterpart
hereof shall be deemed to be an original instrument, but all such counterparts
together shall constitute but one agreement.

 

5.  Governing Law.  This Amendment shall be governed by and
construed in accordance with the domestic laws of the State of New York,
without giving effect to any law or rule that would cause the laws of any
jurisdiction other than the State of New York to be applied.

 

[The remainder of this page intentionally left blank]

 

3

 

                IN WITNESS
WHEREOF, the parties hereto have executed this Second Amendment to Third
Amended and Restated Registration Rights Agreement as of the date and year
first above written.

 

	
   

  	
  NEXSAN CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Philip Black

  
	
   

  	
  Name:

  	
  Philip Black

  
	
   

  	
  Title:

  	
  CEO

  

 

 

 

[Signature
Page to Second Amendment to Third Amended and Restated Registration Rights
Agreement]

 

	
   

  	
  Stockholder:

  
	
   

  	
   

  
	
   

  	
  BEECHTREE CAPITAL LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ G M Weiss

  
	
   

  	
  Name:

  	
  George Weiss

  
	
   

  	
  Title:

  	
  Managing Member

  
	
   

  	
   

  
	
   

  	
  1,656,279

  
	
   

  	
  Number
  of Shares of Common Stock

  
	
   

  	
   

  
	
   

  	
  0

  
	
   

  	
  Number
  of Shares of Series A Preferred Stock

  
	
   

  	
   

  
	
   

  	
  284,647

  
	
   

  	
  Number
  of Shares of Series C Preferred Stock

  

 

 

 

[Signature
Page to Second Amendment to Third Amended and Restated Registration Rights
Agreement]

 

	
   

  	
  Stockholder:

  
	
   

  	
   

  
	
   

  	
  CDLM-WEISS ASSOCIATES

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ G M Weiss

  
	
   

  	
  Name:

  	
  George Weiss

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  2,425,226

  
	
   

  	
  Number
  of Shares of Common Stock

  
	
   

  	
   

  
	
   

  	
  0

  
	
   

  	
  Number
  of Shares of Series A Preferred Stock

  
	
   

  	
   

  
	
   

  	
  0

  
	
   

  	
  Number
  of Shares of Series C Preferred Stock

  

 

 

 

[Signature
Page to Second Amendment to Third Amended and Restated Registration Rights
Agreement]

 

	
   

  	
  Stockholder:

  
	
   

  	
   

  
	
   

  	
  DLG INVESTMENT PARTNERSHIP

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ G M Weiss

  
	
   

  	
  Name:

  	
  George Weiss

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  674,443

  
	
   

  	
  Number
  of Shares of Common Stock

  
	
   

  	
   

  
	
   

  	
  179,585

  
	
   

  	
  Number
  of Shares of Series A Preferred Stock

  
	
   

  	
   

  
	
   

  	
  0

  
	
   

  	
  Number
  of Shares of Series C Preferred Stock

  

 

 

 

[Signature
Page to Second Amendment to Third Amended and Restated Registration Rights
Agreement]

 

	
   

  	
  Stockholder:

  
	
   

  	
   

  
	
   

  	
  FIRST GEN-E — SERVICOS DE CONSULTORIA SA

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Domenico Grassi

  
	
   

  	
  Name:

  	
  Domenico Grassi

  
	
   

  	
  Title:

  	
  Manager

  
	
   

  	
   

  
	
   

  	
  15,743,596

  
	
   

  	
  Number
  of Shares of Common Stock

  
	
   

  	
   

  
	
   

  	
  7,196,889

  
	
   

  	
  Number
  of Shares of Series A Preferred Stock

  
	
   

  	
   

  
	
   

  	
  2,491,064

  
	
   

  	
  Number
  of Shares of Series C Preferred Stock

  

 

 

 

[Signature
Page to Second Amendment to Third Amended and Restated Registration Rights
Agreement]

 

	
   

  	
  Stockholder:

  
	
   

  	
   

  
	
   

  	
  RRE VENTURES FUND III, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Andrew Zalasin

  
	
   

  	
  Name:

  	
  Andrew Zalasin

  
	
   

  	
  Title:

  	
  General Partner

  
	
   

  	
   

  
	
   

  	
  0

  
	
   

  	
  Number
  of Shares of Common Stock

  
	
   

  	
   

  
	
   

  	
  559,507

  
	
   

  	
  Number
  of Shares of Series A Preferred Stock

  
	
   

  	
   

  
	
   

  	
  88,406

  
	
   

  	
  Number
  of Shares of Series C Preferred Stock

  

 

 

 

[Signature
Page to Second Amendment to Third Amended and Restated Registration Rights
Agreement]

 

	
   

  	
  Stockholder:

  
	
   

  	
   

  
	
   

  	
  RRE VENTURES III, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Andrew Zalasin

  
	
   

  	
  Name:

  	
  Andrew Zalasin

  
	
   

  	
  Title:

  	
  General Partner

  
	
   

  	
   

  
	
   

  	
  0

  
	
   

  	
  Number
  of Shares of Common Stock

  
	
   

  	
   

  
	
   

  	
  308,114

  
	
   

  	
  Number
  of Shares of Series A Preferred Stock

  
	
   

  	
   

  
	
   

  	
  48,683

  
	
   

  	
  Number
  of Shares of Series C Preferred Stock

  

 

 

 

[Signature
Page to Second Amendment to Third Amended and Restated Registration Rights
Agreement]

 

	
   

  	
  Stockholder:

  
	
   

  	
   

  
	
   

  	
  RRE VENTURES III-A, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Andrew Zalasin

  
	
   

  	
  Name:

  	
  Andrew Zalasin

  
	
   

  	
  Title:

  	
  General Partner

  
	
   

  	
   

  
	
   

  	
  0

  
	
   

  	
  Number
  of Shares of Common Stock

  
	
   

  	
   

  
	
   

  	
  6,695,372

  
	
   

  	
  Number
  of Shares of Series A Preferred Stock

  
	
   

  	
   

  
	
   

  	
  1,057,909

  
	
   

  	
  Number
  of Shares of Series C Preferred Stock

  

 

 

 

 

 

[Signature
Page to Second Amendment to Third Amended and Restated Registration Rights
Agreement]

 

	
   

  	
  Stockholder:

  
	
   

  	
   

  
	
   

  	
  VANTAGEPOINT VENTURE PARTNERS IV (Q), L.P.

  
	
   

  	
  By:

  	
  VantagePoint Venture Associates IV, L.L.C.,

  
	
   

  	
   

  	
  its general

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Alan E. Salzman

  
	
   

  	
  Name:

  	
  Alan E. Salzman

  
	
   

  	
  Title:

  	
  Managing Member

  
	
   

  	
   

  
	
   

  	
  0

  
	
   

  	
  Number
  of Shares of Common Stock

  
	
   

  	
   

  
	
   

  	
  22,837,719

  
	
   

  	
  Number
  of Shares of Series A Preferred Stock

  
	
   

  	
   

  
	
   

  	
  3,596,901

  
	
   

  	
  Number
  of Shares of Series C Preferred Stock

  
				

 

 

 

[Signature
Page to Second Amendment to Third Amended and Restated Registration Rights
Agreement]

 

	
   

  	
  Stockholder:

  
	
   

  	
   

  
	
   

  	
  VANTAGEPOINT VENTURE PARTNERS IV PRINCIPALS FUND, L.P.

  
	
   

  	
  By:

  	
  VantagePoint Venture Associates IV, L.L.C.,

  
	
   

  	
   

  	
  its general

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Alan E. Salzman

  
	
   

  	
  Name:

  	
  Alan E. Salzman

  
	
   

  	
  Title:

  	
  Managing Member

  
	
   

  	
   

  
	
   

  	
  0

  
	
   

  	
  Number
  of Shares of Common Stock

  
	
   

  	
   

  
	
   

  	
  83,193

  
	
   

  	
  Number
  of Shares of Series A Preferred Stock

  
	
   

  	
   

  
	
   

  	
  13,103

  
	
   

  	
  Number
  of Shares of Series C Preferred Stock

  
				

 

 

 

[Signature
Page to Second Amendment to Third Amended and Restated Registration Rights
Agreement]

 

	
   

  	
  Stockholder:

  
	
   

  	
   

  
	
   

  	
  VANTAGEPOINT VENTURE PARTNERS IV, L.P.

  
	
   

  	
  By:

  	
  VantagePoint Venture Associates IV, L.L.C.,

  
	
   

  	
   

  	
  its general

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Alan E. Salzman

  
	
   

  	
  Name:

  	
  Alan E. Salzman

  
	
   

  	
  Title:

  	
  Managing Member

  
	
   

  	
   

  
	
   

  	
  0

  
	
   

  	
  Number
  of Shares of Common Stock

  
	
   

  	
   

  
	
   

  	
  2,289,066

  
	
   

  	
  Number
  of Shares of Series A Preferred Stock

  
	
   

  	
   

  
	
   

  	
  360,088

  
	
   

  	
  Number
  of Shares of Series C Preferred Stock

  
				

 

 

 

[Signature
Page to Second Amendment to Third Amended and Restated Registration Rights
Agreement]

 

	
   

  	
  Stockholder:

  
	
   

  	
   

  
	
   

  	
  FONDS DE SOLIDARITÉ DES TRAVAILLEURS DU QUÉBEC (F.T.Q.)

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jacques Bernier

  
	
   

  	
  Name: 

  	
  Jacques Bernier

  
	
   

  	
  Title:

  	
  SVP Information Technologies, Telecommunications and
  Industrial Innovations

  
	
   

  	
   

  
	
   

  	
  0

  
	
   

  	
  Number
  of Shares of Common Stock

  
	
   

  	
   

  
	
   

  	
  0

  
	
   

  	
  Number
  of Shares of Series A Preferred Stock

  
	
   

  	
   

  
	
   

  	
  15,000,000

  
	
   

  	
  Number of Shares of Series C Preferred Stock

  

 

 

 

[Signature
Page to Second Amendment to Third Amended and Restated Registration Rights
Agreement]

 

	
   

  	
  Stockholder:

  
	
   

  	
   

  
	
   

  	
  /s/ Thomas F. Gosnell

  
	
   

  	
  THOMAS F. GOSNELL

  
	
   

  	
   

  
	
   

  	
  0

  
	
   

  	
  Number
  of Shares of Common Stock

  
	
   

  	
   

  
	
   

  	
  0

  
	
   

  	
  Number
  of Shares of Series A Preferred Stock

  
	
   

  	
   

  
	
   

  	
  1

  
	
   

  	
  Number
  of Shares of Series B Preferred Stock

  
	
   

  	
   

  
	
   

  	
  0

  
	
   

  	
  Number of Shares of
  Series C Preferred Stock

  

 

 

 

[Signature
Page to Second Amendment to Third Amended and Restated Registration Rights
Agreement]

 

	
   

  	
  Stockholder:

  
	
   

  	
   

  
	
   

  	
  LEDGEWOOD
  PROPERTIES, INC. PROFIT SHARING PLAN

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeffrey B. Hanson, Trustee

  
	
   

  	
  Name:

  	
  Jeffrey Hanson

  
	
   

  	
  Title:

  	
  Trustee

  
	
   

  	
   

  
	
   

  	
  827,439

  
	
   

  	
  Number
  of Shares of Common Stock

  
	
   

  	
   

  
	
   

  	
  118,370

  
	
   

  	
  Number
  of Shares of Series A Preferred Stock

  
	
   

  	
   

  
	
   

  	
  243,222

  
	
   

  	
  Number
  of Shares of Series C Preferred Stock

  

 

 

 

[Signature
Page to Second Amendment to Third Amended and Restated Registration Rights
Agreement]

 

	
   

  	
  Stockholder:

  
	
   

  	
   

  
	
   

  	
  SANDERS
  OPPORTUNITY FUND, LP

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Don A. Sanders

  
	
   

  	
  Name:

  	
  Don A. Sanders

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  135,716

  
	
   

  	
  Number
  of Shares of Common Stock

  
	
   

  	
   

  
	
   

  	
  148,367

  
	
   

  	
  Number
  of Shares of Series A Preferred Stock

  
	
   

  	
   

  
	
   

  	
  116,195

  
	
   

  	
  Number
  of Shares of Series C Preferred Stock

  

 

 

 

[Signature
Page to Second Amendment to Third Amended and Restated Registration Rights
Agreement]

 

	
   

  	
  Stockholder:

  
	
   

  	
   

  
	
   

  	
  SANDERS
  OPPORTUNITY FUND (INST), LP

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Don A. Sanders

  
	
   

  	
  Name:

  	
  Don A. Sanders

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  483,532

  
	
   

  	
  Number
  of Shares of Common Stock

  
	
   

  	
   

  
	
   

  	
  427,925

  
	
   

  	
  Number
  of Shares of Series A Preferred Stock

  
	
   

  	
   

  
	
   

  	
  370,995

  
	
   

  	
  Number
  of Shares of Series C Preferred Stock

  

 

 

 

[Signature
Page to Second Amendment to Third Amended and Restated Registration Rights
Agreement]

 

	
   

  	
  Stockholder:

  
	
   

  	
   

  
	
   

  	
  /s/ Don A. Sanders

  
	
   

  	
  DON A. SANDERS

  
	
   

  	
   

  
	
   

  	
  540,699

  
	
   

  	
  Number
  of Shares of Common Stock

  
	
   

  	
   

  
	
   

  	
  516,197

  
	
   

  	
  Number
  of Shares of Series A Preferred Stock

  
	
   

  	
   

  
	
   

  	
  487,190

  
	
   

  	
  Number
  of Shares of Series C Preferred Stock

  

 

 

 

[Signature
Page to Second Amendment to Third Amended and Restated Registration Rights
Agreement]

 

	
   

  	
  Stockholder:

  
	
   

  	
   

  
	
   

  	
  /s/ Katherine U. Sanders

  
	
   

  	
  KATHERINE U. SANDERS

  
	
   

  	
   

  
	
   

  	
  184,818

  
	
   

  	
  Number
  of Shares of Common Stock

  
	
   

  	
   

  
	
   

  	
  89,792

  
	
   

  	
  Number
  of Shares of Series A Preferred Stock

  
	
   

  	
   

  
	
   

  	
  243,595

  
	
   

  	
  Number
  of Shares of Series C Preferred Stock

  

 

 

 

[Signature
Page to Second Amendment to Third Amended and Restated Registration Rights
Agreement]

 

	
   

  	
  Stockholder:

  
	
   

  	
   

  
	
   

  	
  WEIR
  HOLDINGS LP

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Don Weir

  
	
   

  	
  Name:

  	
  Don Weir

  
	
   

  	
  Title:

  	
  Trustee

  
	
   

  	
   

  
	
   

  	
  27,845

  
	
   

  	
  Number
  of Shares of Common Stock

  
	
   

  	
   

  
	
   

  	
  131,897

  
	
   

  	
  Number
  of Shares of Series A Preferred Stock

  
	
   

  	
   

  
	
   

  	
  0

  
	
   

  	
  Number
  of Shares of Series C Preferred Stock

  

 

 

 

[Signature
Page to Second Amendment to Third Amended and Restated Registration Rights
Agreement]

 

	
   

  	
  Stockholder:

  
	
   

  	
   

  
	
   

  	
  DON
  WEIR & JULIE ELLEN WEIR JT TEN

  
	
   

  	
   

  
	
   

  	
  /s/ Don Weir

  
	
   

  	
  Don Weir

  
	
   

  	
   

  
	
   

  	
  /s/ Julie Weir

  
	
   

  	
  Julie Ellen Weir

  
	
   

  	
   

  
	
   

  	
  178,571

  
	
   

  	
  Number of Shares of Common Stock

  
	
   

  	
   

  
	
   

  	
  60,200

  
	
   

  	
  Number
  of Shares of Series A Preferred Stock

  
	
   

  	
   

  
	
   

  	
  243,595

  
	
   

  	
  Number
  of Shares of Series C Preferred StockEXHIBIT
4.3

 

EXCHANGE
AGREEMENT

 

MEMORANDUM OF AGREEMENT made as of the 24th day of
March, 2005, between Nexsan Corporation, a
corporation existing under the laws of Delaware (hereinafter referred to as
“Parent”),
6360319 Canada Inc., a corporation existing under the federal laws of
Canada (hereinafter referred to as the “Corporation”),
6360246 Canada Inc., a corporation existing under the federal laws of Canada
(hereinafter referred to as “CallCo”) and
Thomas F. Gosnell (“Gosnell”).

 

WHEREAS pursuant to an purchase agreement (the “Purchase Agreement”) dated as of March 142005 by and
among Parent, the Corporation, AESign Evertrust Inc.  (“AESign”),
Gosnell, Esther Hotter, Rosamaria Koppes,
Puneet Mehta and Robert G.  Delamore, the
Corporation has agreed to issue exchangeable  shares in the capital of the Corporation (the  “Exchangeable Shares”)
to Gosnell in part consideration for the  purchase by the Corporation of all of the issued and outstanding Class A
common shares of AESign owned by Gosnell;

 

AND WHEREAS pursuant to the Purchase Agreement, the parties
hereto agreed to execute an exchange agreement substantially in the form of
this exchange agreement;

 

NOW THEREFORE in consideration of the respective covenants and
agreements provided in this exchange agreement and for other good and valuable
consideration (the receipt and sufficiency of which are hereby acknowledged),
the parties hereto covenant and agree as follows:

 

ARTICLE
1

DEFINITIONS AND INTERPRETATION

 

1.1                                 Definitions

 

In this exchange agreement, the following terms shall
have the following meanings:

 

“Affiliate”
of any Person means any other Person directly or indirectly controlling,
controlled by, or
under common control with, that Person. 
For the purposes of this definition, “control” (including, with correlative meanings, the terms “controlled by”
and “under common control with”), as applied to any Person,  means the possession by another Person, directly
or indirectly, of the power to direct or cause the direction of the management and policies of that
first mentioned Person, whether through the ownership of voting securities, by
contract or otherwise.

 

“Automatic
Exchange Rights” means the benefit of the obligation of Parent to
effect the automatic
exchange of Parent Common Shares for Exchangeable Shares pursuant to section
3.12.

 

“Board of
Directors” means the Board of Directors of the Corporation or
Parent, as the case may be.

 

“Business Day”
means any day on which commercial banks are generally open for business in
Woodland Hills, California and Montreal, Quebec, other than a Saturday, a
Sunday or a day observed as a holiday in
Montreal, Quebec under the laws of the Province of Quebec or  the federal laws of Canada or under the
laws of the State of California or the federal laws of the United States of
America.

 

 

“CallCo” means
6360246 Canada Inc., a corporation incorporated under the federal laws of
Canada and being a direct wholly-owned Subsidiary of Parent.

 

“Canadian Dollar Equivalent”
means, in respect of an amount expressed in a currency other than Canadian dollars (the  “Foreign Currency Amount”)
at any date, the product obtained by multiplying: (a) the Foreign
Currency Amount, by (b) the noon spot exchange rate on such date for such
foreign currency expressed in Canadian
dollars as reported by the Bank of Canada or, in the event such spot exchange
rate is not  available, such exchange
rate on such date for such foreign currency expressed in Canadian dollars as
may be deemed by the Board of Directors to be appropriate for such
purpose.

 

“Corporation”
means 6360319 Canada Inc., a corporation existing under the federal laws of
Canada and being a
wholly-owned subsidiary of CallCo.

 

“Current Market Price”
means, in respect of a Parent Common Share on any date, the Canadian Dollar Equivalent of the weighted average of the
daily trading prices of Parent Common Shares during a period  of 20 consecutive trading days ending not more
than three trading days before such date on the principal stock  exchange or automated quotation system on which
the Parent Common Shares are then listed or quoted, as the  case maybe, as may be selected by the Board of
Directors of Parent for such purpose; provided, however, that if in the
opinion of the Board of Directors of Parent the public distribution or trading
activity of Parent Common Shares during such period does not create a market
which reflects the fair market value of a Parent Common Shares or of the Parent
Common Shares are not then listed or quoted on a stock exchange or quotation system, then the Current Market Price of
a Parent Common Share shall be determined by the Board  of Directors of Parent, acting reasonably and in
good faith and in its sole discretion, and provided further that any
such selection, opinion or determination by the Board of Directors of Parent
shall be conclusive and binding.

 

“Entity” means
any corporation (including any non-profit corporation), general partnership,
limited partnership, limited liability partnership, joint venture, estate,
trust, Corporation (including any Corporation limited by shares, limited
liability Corporation or joint stock Corporation), firm, society or other
enterprise, association, organization or entity.

 

“Exchange Right”
has the meaning ascribed to that term in section 3.1.

 

“Exchangeable
Share” means a share in the class of non-voting exchangeable shares
in the capital of the
Corporation having the rights, privileges, restrictions and conditions set
forth in the Exchangeable Share Provisions.

 

“Exchangeable Shareholder”
means Gosnell, or any subsequent registered holder of the Exchangeable Shares,
other than Parent and the Parent Affiliates.

 

“Exchangeable
Share Provisions” means the rights, privileges, restrictions and
conditions attaching
to the Exchangeable Shares.

 

2

 

“Exchangeable
Share Support Agreement” means the exchangeable share support
agreement made as of
even date herewith among the Corporation, CallCo and Parent.

 

“Governmental Body”
means any: (a) nation, state, commonwealth, province, territory, county, municipality, district or other jurisdiction of
any nature; (b) federal, state, provincial, local, municipal, foreign
or other government; or (c) governmental or quasi-governmental authority
of any nature (including any governmental
division, department, agency, commission, instrumentality, official, ministry,
fund, foundation, center, organization, unit, body or Entity and any
court or other tribunal).

 

“Insolvency
Event” means the institution by the Corporation of any proceeding to
be adjudicated a bankrupt
or insolvent or to be wound up, or the consent of the Corporation to the
institution of bankruptcy, insolvency or winding-up proceedings against the
Corporation, or the filing of any proceeding seeking dissolution or winding-up
under any bankruptcy, insolvency or analogous laws, including without
limitation the Companies’ Creditors
Arrangement Act (Canada)
and the Bankruptcy and Insolvency Act (Canada), and the failure by the
Corporation to contest in good faith any such proceedings commenced in respect
of the Corporation within 30 days of becoming aware thereof, or the consent by
the Corporation to the commencement of any
such proceeding or to the appointment of a receiver, or the making by the
Corporation of a general assignment for the benefit of creditors, or the
admission in writing by the Corporation of its inability to pay its debts
generally as they become due, or the Corporation not being permitted, pursuant
to solvency requirements of applicable law, to redeem any Retracted Shares
pursuant to section 6.6 of the Exchangeable Share Provisions.

 

“Liquidation
Call Right” has the meaning ascribed to that term in section 5.4 of
the Exchangeable
Share Provisions.

 

“Liquidation Event”
has the meaning ascribed to that term in section 3.12(1).

 

“Liquidation Event
Effective Date” has the meaning ascribed to that term in section
3.12(c).

 

“Officer’s Certificate”
means, with respect to Parent or the Corporation, as the case may be, a
certificate signed by any one of the authorized signatories of Parent or the
Corporation, as the case may be.

 

“Parent”
means Nexsan Corporation, a corporation existing under the laws of the State of
Delaware, and
includes any successor thereto.

 

“Parent Affiliates”
means Affiliates of Parent.

 

“Parent Common Share”
means a share of common stock in the capital of Parent, and any other security
into which such share may be changed.

 

“Parent
Special Voting Share” means the
one (1) Series B Preferred Share of Parent that entitles the  holder of record of the share, subject to
adjustment, to one (1) vote for each Exchangeable Share so held by it
at meetings of the holders of Parent Common Shares.

 

3

 

“Parent Successor”
has the meaning ascribed to that term in section 5.1.

 

“Person” means
any individual, Entity or Governmental Body.

 

“Purchase Agreement”
means the agreement made as of March 14, 2005 between Parent, the Corporation, AESign Evertrust Inc., Gosnell,
Esther Hotter, Rosamaria Koppes, Puneet Mehta and Robert G.  Delamore as amended, supplemented
and/or restated in accordance therewith.

 

“Redemption Call Right”
has the meaning ascribed to that term in section 7.4 of the Exchangeable Share
Provisions.

 

“Retracted Shares”
has the meaning ascribed to that term in section 3.6.

 

“Retraction
Call Right” has the meaning ascribed to that term in section 6.1(c) of
the Exchangeable
Share Provisions.

 

1.2                                 Interpretation Not Affected by
Headings, etc.

 

The division of this exchange
agreement into Articles, sections and other portions and the insertion of headings are for convenience of
reference only and should not affect the construction or interpretation of this
exchange agreement.  Unless otherwise
indicated, all references to an “Article” or “section” followed by a number
and/or a letter refer to the specified Article or section of this exchange
agreement.  The terms “this exchange
agreement”, “hereof’, “herein” and “hereunder” and similar expressions refer to
this exchange agreement and not to any particular Article, section or other
portion hereof and include any agreement or instrument supplementary or
ancillary hereto.

 

1.3                                 Number, Gender, etc.

 

Words importing the singular number only shall include
the plural and vice versa.  Words importing any gender shall
include all genders.

 

1.4                                 Date for any Action.

 

If any date on which any action
is required to be taken under this exchange agreement is not a Business Day, such action shall be required to be
taken on the next succeeding Business Day.

 

ARTICLE
2

TRANSFERS

 

2.1                                 Restrictions on Transfer of
Exchangeable Shares.

 

(a)                                  The Exchangeable Shareholder agrees not
to transfer, assign or sell any of the Exchangeable Shares except as
specifically provided in the Exchangeable Share Provisions or with the written
consent of Parent.

 

4

 

(b)                                 Unless Parent otherwise determines, it
shall be a condition of any consent by Parent given under section 2.1(a) that
the Exchangeable Shareholder must transfer, assign or sell all Exchangeable Shares then held by the Exchangeable
Shareholder and to the same transferee, assignee or purchaser, and
concurrently transfer, assign or sell the Parent Special Voting Share then held
by the Exchangeable Shareholder to such transferee, assignee or purchaser, and

 

(c)                                  Notwithstanding the provisions of section
2.1(a) but subject to the condition contained in the section 2.1(b),
Gosnell shall have the right, without the prior written consent of Parent, to
transfer all of his Exchangeable Shares (i) by will or the laws of decent
and distribution, in which event each such transferee shall be bound by all of
the provisions of this exchange agreement to the same extent as if such
transferee were Gosnell, or (ii) to a company wholly-owned directly or
indirectly only by Gosnell, his spouse and/or his issue for tax planning
purposes, provided any such transfer is completed on an income tax deferred
basis and written notice thereof shall have been given by Gosnell to Parent.

 

(d)                                 No transfer of Exchangeable Shares on the
consent of Parent or pursuant to section 2.1(c)(ii) shall, however, be
permitted or be valid or effective until written notice thereof shall have been
given by Gosnell to Parent and until the transferee of the Exchangeable Shares
shall have entered into an agreement with the other parties hereto consenting
to the terms hereof and agreeing to assume and be bound by all of the
obligations of Gosnell herein as though such
transferee were Gosnell, in which event such transferee shall, subject to the
terms hereof,  be entitled to all of the
rights and be subject to all of the obligations of Gosnell herein  mutatis mutandis.

 

(e)                                  Gosnell covenants that in the event of a
transfer of Exchangeable Shares by Gosnell to a company wholly-owned directly or indirectly by Gosnell, his spouse
and/or his issue pursuant to section 2.1(c)(ii), for so long as the
transferee is the holder of Exchangeable Shares, Gosnell shall not and Gosnell shall cause his spouse and/or issue not to
transfer any direct or  indirect
interest in the transferee; and (ii) Gosnell shall cause the transferee
not to take part in any amalgamation, merger, reorganization or similar
proceeding, the effect of which would result in the transferee or the resulting
body corporate not being wholly-owned directly or indirectly by Gosnell, his
spouse and/or his issue.

 

2.2                                 Restrictions on Transfer of
Parent Special Voting Share.

 

The Exchangeable Shareholder agrees not to transfer,
assign or sell the Parent Special Voting Share, except as required by sections
2.1 and 2.4 of this exchange agreement.

 

2.3                                 Restrictions on Pledge of
Exchangeable Shares and Parent Special Voting Share.

 

The Exchangeable Shareholder
agrees not to pledge, mortgage, or charge any of, or any interest in, the Exchangeable Shares or the Parent
Special Voting Share without the prior written consent of Parent.

 

5

 

2.4                                 Automatic Redemption of the
Parent Special Voting Share.

 

The Exchangeable Shareholder
acknowledges that upon the exchange of all Exchangeable Shares held by the Exchangeable Shareholder
including, without limitation, pursuant to the exercise by an Exchangeable
Shareholder of the Exchange Right or the occurrence of the automatic exchange
of Exchangeable Shares for Parent Common Shares, as specified in Article 4
(unless, in either case, Parent shall not have delivered the requisite Parent
Common Shares issuable in exchange for the Exchangeable Shares to the
Exchangeable Shareholder), or upon the
redemption of Exchangeable Shares pursuant to Article 6 or 7 of the Exchangeable
Share Provisions, or upon the effective date of the liquidation, dissolution or
winding-up of the Corporation pursuant to Article 5
of the Exchangeable Share Provisions, or upon the purchase of Exchangeable
Shares from  the holder thereof by
CallCo pursuant to the exercise by CallCo of the Retraction Call Right, the
Redemption Call Right or the Liquidation Call Right, or upon the
purchase of the Exchangeable Shares from the holder thereof by the Corporation
pursuant to Article 8 of the Exchangeable Share Provisions, the Parent
Special Voting Share shall be automatically redeemed pursuant to the terms and
conditions attaching to the Parent Special Voting Share and thereafter the
Exchangeable Shareholder shall cease to be a holder of the Parent Special
Voting Share and shall not be entitled to exercise any of the rights in respect
thereof.

 

2.5                                 Legended Share Certificates.

 

The Corporation will cause each certificate
representing Parent Special Voting Share to bear an appropriate legend notifying the Exchangeable Shareholder of
restrictions applicable to such Parent Special Voting Share  and any other legend that is required or as may be
reasonably necessary having regard to the provisions of any state,
provincial, local or foreign law governing such securities.

 

ARTICLE
3

EXCHANGE RIGHT AND AUTOMATIC EXCHANGE

 

3.1                                 Grant and Ownership of the
Exchange Right.

 

Parent hereby grants to the
Exchangeable Shareholder the right (the  “Exchange Right”), exercisable upon the occurrence and
during the continuance of (a) an Insolvency Event, or (b) the failure
of the Corporation or CallCo, as the case
maybe, by reason other than an Insolvency Event to purchase the Retracted
Shares pursuant to a duly completed and delivered Retraction Request (as such
term is defined in the Exchangeable Share
Provisions), to require Parent to purchase from the Exchangeable Shareholder
all or any part of the Exchangeable Shares held by the Exchangeable
Shareholder and the Automatic Exchange Rights, all in accordance with the provisions of this exchange agreement.  Parent hereby acknowledges receipt from the
Exchangeable Shareholder of good and
valuable consideration (and the adequacy thereof) for the grant of the
Exchange Right and the Automatic Exchange Rights by Parent to the Exchangeable
Shareholder.  The obligations of Parent to issue Parent Common Shares pursuant to the
Exchange Right or Automatic Exchange Rights are subject to all
applicable laws and regulatory and stock exchange requirements.

 

6

 

3.2                                 Legended Share Certificates.

 

Parent will cause each certificate representing
Exchangeable Shares to bear an appropriate legend notifying the Exchangeable
Shareholder of:

 

(a)                                  his right to the exercise of the Exchange
Right in respect of the Exchangeable Shares held by the Exchangeable
Shareholder;

 

(b)                                 the Automatic Exchange Rights; and

 

(c)                                  any other legend that is required or as
may be reasonably necessary having regard to the provisions of any federal,
state, provincial, local or foreign law governing such securities.

 

3.3                                 Purchase Price.

 

The purchase price payable by Parent for each
Exchangeable Share to be purchased by Parent under the Exchange Right shall be
an amount per share equal to (a) the Current Market Price of a Parent
Common Share on the last Business Day prior
to the day of closing of the purchase and sale of such Exchangeable Share
under the Exchange Right, which shall be satisfied in full by Parent causing to
be sent to such holder one Parent Common Share, plus (b) to the extent not
paid by the Corporation, an additional amount equivalent to the full amount of all declared and unpaid
dividends on each such Exchangeable Share held by such holder on  any dividend record date which occurred prior to
the closing of the purchase and sale.  In
connection with each  exercise of the
Exchange Right, Parent shall provide to the Exchangeable Shareholder an Officer’s
Certificate setting forth the calculation of the purchase price for each
Exchangeable Share.  The purchase price
for each such Exchangeable Share so
purchased may be satisfied only by Parent issuing and delivering or causing to
be delivered to the Exchangeable Shareholder, one Parent Common Share
and on the applicable payment date a cheque
for the balance, if any, of the purchase price without interest (but less any
amounts withheld pursuant to section 4.13).  Upon payment of such purchase price, the
Exchangeable Shareholder shall cease to have any right to be paid by the Corporation or Parent any amount in respect of
declared and unpaid dividends on each such Exchangeable Share.

 

3.4                                 Exercise Instructions.

 

Subject to the terms and conditions herein set forth,
the Exchangeable Shareholder shall be entitled, upon the occurrence and during the continuance of an Insolvency Event,
to exercise the Exchange Right with  respect
to all or any part of the Exchangeable Shares registered in the name of such
Exchangeable Shareholder  on the books
of the Corporation.  To cause the
exercise of the Exchange Right, the Exchangeable Shareholder shall
deliver to Parent, in person or by certified or registered mail, at its
principal office in Woodland Hills, California or at such other places as
Parent may from time to time designate by written notice to the Exchangeable
Shareholder, the certificates representing the Exchangeable Shares which such
Exchangeable Shareholder desires Parent to purchase, duly endorsed in blank for
transfer, and accompanied by such other documents and instruments as may be
necessary or advisable to effect a transfer of Exchangeable Shares together with (a) a duly completed form of
notice of exercise of the Exchange Right, contained on the reverse of or
attached to the Exchangeable Share certificates, stating (i) that the

 

7

 

Exchangeable Shareholder
hereby exercises the Exchange Right so as to require Parent to purchase from
the Exchangeable Shareholder the number of
Exchangeable Shares specified therein, (ii) that the Exchangeable
Shareholder has good title to and owns all such Exchangeable Shares to
be acquired by Parent free and clear of all liens, claims, security interests,
adverse claims and encumbrances, (iii) the names in which the certificates
representing Parent Common Shares issuable
in connection with the exercise of the Exchange Right are to be issued, and (iv) the
names and addresses of the Persons to whom such new certificates should be
delivered and (b) payment (or evidence
satisfactory to the Corporation and Parent of payment) of the taxes (if any)
payable as contemplated by section 3.7 of this exchange agreement.  If only a part of the Exchangeable Shares
represented by any certificate or certificates delivered to Parent are to be
purchased by Parent under the Exchange Right, a new certificate for the balance
of such Exchangeable Shares shall be issued to the holder at the expense of the
Corporation.

 

3.5                                 Delivery of Parent Common Shares;
Effect of Exercise.

 

Within ten (10) Business Days after receipt of
the certificates representing the Exchangeable Shares which the Exchangeable Shareholder desires Parent to purchase under the
Exchange Right, together with such  documents
and instruments of transfer and a duly completed form of notice of exercise of
the Exchange Right  (and payment of
taxes, if any, payable as contemplated by section 3.7 or evidence thereof),
duly endorsed for transfer to Parent, Parent shall promptly thereafter
deliver or cause to be delivered to the Exchangeable Shareholder such
Exchangeable Shares (or to such other Persons, if any, properly designated by
such Exchangeable Shareholder) the number of
Parent Common Shares issuable in connection with the exercise of the
Exchange Right, and on the applicable payment date cheques for the balance, if
any, of the total purchase price therefor without interest (but less any
amounts withheld pursuant to section 3.13); provided, however, that no such
delivery shall be made unless and until the Exchangeable Shareholder requesting
the same shall have paid (or provided
evidence satisfactory to the Corporation and Parent of the payment of) the
taxes (if any)  payable as
contemplated by section 3.7 of this exchange agreement.  Immediately upon the giving of notice by
the Exchangeable Shareholder to Parent and
the Corporation of the exercise of the Exchange Right as provided in
this section 3.5, the closing of the transaction of purchase and sale
contemplated by the Exchange Right shall be deemed to have occurred and the
holder of such Exchangeable Shares shall be deemed to have transferred to Parent all of such holder’s right,
title and interest in and to such Exchangeable Shares and shall cease to
be a holder of such Exchangeable Shares and shall not be entitled to exercise
any of the rights of a holder in respect thereof, other than the right to
receive his proportionate part of the total purchase price for those Exchangeable Shares (together with a cheque
for the balance, if any, of the total purchase price therefor without
interest (but less any amounts withheld pursuant to section 3.12)), unless the
requisite number of Parent Common Shares is
not allotted, issued and delivered by Parent to the Exchangeable Shareholder
within  ten Business Days of the date
of the giving of such notice by the Exchangeable Shareholder and cheque for the
balance, if any, of the total purchase price for such Exchangeable Shares is
not issued and delivered to the Exchangeable Shareholder on the applicable
payment date, in which case the rights of the Exchangeable Shareholder shall remain unaffected until such
Parent Common Shares are so allotted, issued and delivered by Parent and
any such cheque is issued and delivered by Parent.  Concurrently with the Exchangeable Shareholder ceasing to be a holder of Exchangeable
Shares, the Exchangeable Shareholder shall be considered and deemed for
all purposes to be the holder of the Parent Common Shares delivered to it
pursuant to the Exchange Right.

 

8

 

3.6                                 Exercise of Exchange Right
Subsequent to Retraction.

 

In the event that the Exchangeable Shareholder has
exercised his right under Article 6 of the Exchangeable Share Provisions
to require the Corporation to redeem any or all of the Exchangeable Shares held by the Exchangeable Shareholder (the  “Retracted Shares”)
and is notified by the Corporation
pursuant to section 6.6 of the Exchangeable Share Provisions that the
Corporation will not be permitted as a result of solvency requirements of applicable law to redeem all such Retracted
Shares, and provided that CallCo shall  not
have exercised the Retraction Call Right with respect to the Retracted Shares
and that the Exchangeable Shareholder has not revoked the retraction
request delivered by the Exchangeable Shareholder to the Corporation pursuant to section 6.1 of the
Exchangeable Share Provisions, the retraction request will constitute  and will be deemed to constitute notice from the
Exchangeable Shareholder to Parent exercising the Exchange Right with
respect to those Retracted Shares that the Corporation is unable to redeem.

 

3.7                                 Stamp or Other Transfer Taxes.

 

Upon any sale of Exchangeable Shares to Parent
pursuant to the Exchange Right or the Automatic Exchange Rights, the share
certificate or certificates representing Parent Common Shares to be delivered
in connection with the payment of the total purchase price therefor shall be
issued in the name of the Exchangeable Shareholder of the Exchangeable Shares
so sold; provided, however, that such Exchangeable Shareholder (a) shall pay (and none of Parent or the Corporation
shall be required to pay) any documentary,  stamp, transfer or other taxes that may be payable in respect of any
transfer of such Exchangeable Shares to Parent or in respect of the
issuance or delivery of such Parent Common Shares to the Exchangeable
Shareholder including, without limitation, in the event the Parent Common
Shares are being issued or transferred in
the name of a clearing service or depository or a nominee thereof, or (b) shall
have evidenced to the satisfaction of Parent and the Corporation that
such taxes, if any, have been paid.

 

3.8                                 Notice of Insolvency Event.

 

As soon as practicable following the occurrence of an
Insolvency Event or any event that with the giving
of notice or the passage of time or both would be an Insolvency Event, the
Corporation and Parent shall  give written
notice thereof to the Exchangeable Shareholder, which notice shall contain a
brief statement of the rights of the Exchangeable Shareholder with
respect to the Exchange Right.

 

3.9                                 Parent Common Shares.

 

Parent hereby represents,
warrants and covenants that the Parent Common Shares issuable as described  herein
will be duly authorized and validly issued as fully paid and non-assessable and
shall be free and clear of any lien, claim or encumbrance.

 

9

 

3.10                          Prohibition on Voluntary
Liquidation.

 

Parent covenants that it shall not, and agrees to
cause CallCo to not, take any action relating to a voluntary liquidation,
dissolution or winding-up of the Corporation or its successors or CallCo or its
successors, as the case may be, prior to the Redemption Date (as defined in the
Exchangeable Share Provisions) unless prior
to such liquidation, dissolution or winding-up Parent shall have taken such
actions to  ensure that it is possible
for holders of Exchangeable Shares to extend through to the Redemption Date
(subject  to the continuing effect of
other provisions of this exchange agreement which may permit the redemption or
other termination of the Exchangeable Shares
prior to the Redemption Date) the deferral of any gain incurred by such
holders that would otherwise have been recognized at the Closing Date as a
result of the consummation of the transactions contemplated by the Purchase
Agreement.

 

3.11                           Automatic Exchange on Liquidation
of Parent.

 

(a)                                  Parent will give the Exchangeable
Shareholder notice of each of the following events (each, a “Liquidation Event”)
at the time set forth below:

 

(i)                                     in the event of any determination by the
Board of Directors of Parent to institute voluntary
liquidation, dissolution or winding-up proceedings with respect to Parent or
to effect any other distribution of assets of Parent among its shareholders for
the purpose of winding up its affairs, at
least 60 days prior to the proposed effective date of such liquidation,
dissolution, winding-up or other distribution; and

 

(ii)                                  as soon as practicable following the
earlier of (A) receipt by Parent of notice of, and (B) Parent
otherwise becoming aware of, any threatened or instituted claim, suit, petition or other proceedings with respect to the
involuntary liquidation, dissolution  or
winding-up of Parent or to effect any other distribution of assets of Parent
among  its shareholders for the
purpose of winding up its affairs, in each case where Parent has failed
to contest in good faith any such proceeding commenced in respect of Parent
within 30 days of becoming aware thereof.

 

(b)                                 Such notice shall include a brief
description of the automatic exchange of Exchangeable Shares for Parent Common
Shares provided for in section 3.11(c).

 

(c)                                  In order that the Exchangeable
Shareholder will be able to participate on a pro rata basis with the holders of Parent Common Shares in the
distribution of assets of Parent in connection with a Liquidation Event, on the
fifth Business Day prior to the effective date (the “Liquidation
Event Effective Date”) of a Liquidation Event all of the then
outstanding Exchangeable Shares shall be
automatically exchanged for Parent Common Shares.  To effect such automatic exchange,
Parent shall purchase on the fifth Business Day prior to the Liquidation Event Effective Date each Exchangeable
Share then outstanding and held by the Exchangeable Shareholder, and the
Exchangeable Shareholder shall sell the Exchangeable Shares held by it at such
time, for a total purchase price per share equal to (a) the

 

10

 

Current Market Price of a Parent Common Share on the
fifth Business Day prior to the Liquidation Event Effective Date, which shall
be satisfied in full by Parent issuing to the Exchangeable Shareholder one Parent Common Share, and (b) to
the extent not paid by the Corporation, an  additional amount equivalent to the full amount of all declared and
unpaid dividends on each such Exchangeable Share held by such holder on
any dividend record date which occurred prior to the date of the exchange.  In connection with such automatic exchange,
Parent will provide to the Exchangeable
Shareholder an Officer’s Certificate setting forth the calculation of
the purchase price for each Exchangeable Share.

 

(d)                                 On the fifth Business Day prior to the
Liquidation Event Effective Date, the closing of the transaction of purchase
and sale contemplated by the automatic exchange of Exchangeable Shares for
Parent Common Shares shall be deemed to have occurred, and the Exchangeable
Shareholder shall be deemed to have transferred to Parent all of the
Exchangeable Shareholder’s right, title and
interest in and to the Exchangeable Shareholder’s Exchangeable Shares
and shall cease to be a holder of such Exchangeable Shares and Parent shall
issue to the Exchangeable Shareholder the Parent Common Shares issuable upon
the automatic exchange of Exchangeable
Shares for Parent Common Shares and on the applicable payment date shall
deliver to the Exchangeable Shareholder a cheque for the balance, if any, of
the total purchase price for such Exchangeable Shares without interest but less
any amounts withheld pursuant to section
3.12.  Concurrently with the Exchangeable
Shareholder ceasing  to be a holder
of Exchangeable Shares, the Exchangeable Shareholder shall be considered and
deemed for all purposes to be the holder of
the Parent Common Shares issued pursuant to the  automatic exchange of Exchangeable Shares for Parent Common Shares and
the certificates held by the Exchangeable Shareholder previously
representing the Exchangeable Shares exchanged by the Exchangeable Shareholder
with Parent pursuant to such automatic exchange shall thereafter be deemed to
represent Parent Common Shares issued to the Exchangeable
Shareholder by Parent pursuant to such automatic exchange.  Upon the request of the Exchangeable
Shareholder and the surrender by the Exchangeable Shareholder of Exchangeable Share certificates deemed to
represent Parent Common Shares, duly endorsed  in blank and accompanied by such instruments of transfer as Parent may
reasonably require, Parent shall deliver or cause to be delivered to the
Exchangeable Shareholder certificates representing Parent Common Shares of
which the Exchangeable Shareholder is the holder.

 

3.12                           Withholding Rights.

 

(a)                                  The Exchangeable Shareholder hereby
represents and warrants that he is not a non-resident of Canada within the
meaning of the Income Tax Act (Canada).  The Exchangeable Shareholder covenants and agrees that at the time of the
exchange of all Exchangeable Shares held by the Exchangeable Shareholder
including, without limitation, pursuant to the exercise by an Exchangeable
Shareholder of the Exchange Right or the occurrence of the automatic exchange
of Exchangeable Shares for Parent Common Shares, as specified in Article 4
(unless, in either case,

 

11

 

Parent shall not have delivered the requisite Parent
Common Shares issuable in exchange for the
Exchangeable Shares to the Exchangeable Shareholder), or upon  the redemption of Exchangeable Shares pursuant to Article 6
or 7 of the Exchangeable Share Provisions, or upon the effective date of
the liquidation, dissolution or winding-up of the Corporation pursuant to Article 5 of the Exchangeable Share
Provisions, or upon the purchase  of
Exchangeable Shares from the holder thereof by CallCo pursuant to the exercise
by CallCo of the Retraction Call Right, the Redemption Call Right or the
Liquidation Call Right, or upon the purchase of the Exchangeable Shares from
the holder thereof by the Corporation pursuant to Article 8 of the
Exchangeable Share Provisions, the Exchangeable Shareholder shall deliver to the Corporation, CallCo or
Parent, as the case maybe, a certificate contained a representation and
warranty that such Exchangeable Shareholder in not a non-resident of Canada within the meaning the  Income Tax Act  (Canada) or failing which, the Exchangeable
Shareholder shall deliver a certificate issued by the Canada Revenue Agency
pursuant to section 116 of the  Income Tax Act (Canada) having a “certificate limit”
(as defined therein) of not less than the value of the securities to be
received.

 

(b)                                 In the event that the Exchangeable
Shareholder fails to deliver the certificate in accordance with section
3.12(a), Parent, the Corporation or CallCo, as the case may be, the shall be
entitled to deduct and withhold from any consideration otherwise payable to any
holder of Exchangeable Shares or Parent Common Shares such amounts as Parent,
CallCo or the Corporation is required or permitted to deduct and withhold with
respect to such payment under the  Income Tax Act  (Canada), the  United States Internal Revenue Code of 1986  or any  provision
of provincial, state, local or foreign tax law, in each case as amended or
succeeded.  To the extent that
amounts are so withheld, such withheld amounts shall be treated for all
purposes as having been paid to the holder of the shares in respect of which
such deduction and withholding was made,
provided that such withheld amounts are actually remitted to the
appropriate taxing authority.  To the
extent that the amount so required or permitted to be deducted or withheld from
any payment to a holder exceeds the cash portion of the consideration otherwise payable to the holder, Parent, CallCo and the
Corporation are hereby  authorized to
sell or otherwise dispose of such portion of the consideration as is necessary
to  provide sufficient funds to
Parent, CallCo or the Corporation, as the case may be, to enable it to
comply with such deduction or withholding requirement and Parent, Callco or the
Corporation shall notify the holder thereof
and remit to such holder any unapplied balance of the net proceeds of
such sale.

 

ARTICLE
4

CALL RIGHTS

 

4.1                                 Liquidation Call Right.

 

The Exchangeable Shareholder hereby grants to CallCo
the Liquidation Call Right on the terms and subject to the conditions set forth
in Article 5 of the Exchangeable Shares Provisions.

 

12

 

4.2                                 Retraction Call Right.

 

The Exchangeable Shareholder hereby grants to CallCo
the Retraction Call Right on the terms and subject to the conditions set forth
in Article 6 of the Exchangeable Shares Provisions.

 

4.3                                 Redemption Call Right.

 

The Exchangeable Shareholder hereby grants to CallCo
the Redemption Call Right on the terms and subject to the conditions set forth
in Article 7 of the Exchangeable Shares Provisions.

 

ARTICLE
5

PARENT SUCCESSORS

 

5.1                                 Certain Requirements in Respect
of Combination, etc.

 

As long as any Exchangeable
Shares (other than those held by Parent or its Affiliates) are outstanding,  Parent
shall not consummate any transaction (whether by way of reconstruction,
reorganization, consolidation,  merger,
transfer, sale, lease or otherwise) whereby all or substantially all of its
undertaking, property and assets would become the property of any other
Person or, in the case of a merger, of the continuing corporation resulting
therefrom unless, but may do so if such other Person or continuing corporation
(herein called the “Parent
Successor”), by operation of law, becomes, without more, bound by
the terms and provisions of this exchange agreement or, if not so bound,
executes, prior to or contemporaneously with the consummation of such
transaction, a exchange agreement supplemental hereto to evidence the
assumption by the Parent Successor of liability for all moneys payable and
property deliverable hereunder and the covenant of such Parent Successor to pay and deliver or cause to be delivered the same
and its agreement to observe and perform all the covenants and
obligations of Parent under this exchange agreement.

 

5.2                                 Vesting of Powers in Successor.

 

Whenever the conditions of
section 5.1 have been duly observed and performed, Parent Successor and  the
Corporation shall execute and deliver the supplemental exchange agreement
provided for in Article 6 and  thereupon
Parent Successor shall possess and from time to time may exercise each and
every right and power  of Parent under
this exchange agreement in the name of Parent or otherwise and any act or
proceeding by any  provision of this
exchange agreement required to be done or performed by the Board of Directors
of Parent or  any officers of Parent
may be done and performed with like force and effect by the directors or officers
of such Parent Successor.

 

5.3                                 Wholly-Owned Subsidiaries.

 

Nothing herein shall be construed as preventing the
amalgamation or merger of any wholly-owned direct or indirect subsidiary of
Parent with or into Parent or the winding-up, liquidation or dissolution of any
wholly-owned subsidiary of Parent provided
that all of the assets of such subsidiary are transferred to Parent or  another wholly-owned direct or indirect subsidiary
of Parent and any such transactions are expressly permitted by this Article 5.

 

13

 

ARTICLE
6

AMENDMENTS AND SUPPLEMENTAL EXCHANGE AGREEMENTS

 

6.1                                 Amendments, Modifications, etc.

 

Subject to sections 6.2, 6.3 and
8.1, this exchange agreement may not be amended or modified except by an agreement in writing executed by
Parent, CallCo, the Corporation and the Exchangeable Shareholder.

 

6.2                                 Ministerial Amendments.

 

Notwithstanding the provisions of section 6.1, Parent,
CallCo and the Corporation may in writing, at any time and from time to time,
without the written agreement of the Exchangeable Shareholder, amend or modify
this exchange agreement for the purposes of:

 

(a)                                  adding to the covenants of any or all
parties hereto for the protection of the Exchangeable Shareholder hereunder provided
that the Board of Directors of each of the Corporation, CallCo and Parent shall be of the good faith opinion that such
additions will not be prejudicial to the rights or interests of the
Exchangeable Shareholder;

 

(b)                                 making such amendments or modifications
not inconsistent with this exchange agreement as may be necessary or desirable
with respect to matters or questions which, in the good faith opinion of the
Board of Directors of each of Parent, Callco and the Corporation, having in
mind the best interests of the Exchangeable Shareholder, it may be expedient to
make, provided that such Boards of Directors shall be of the opinion that such
amendments and modifications will not be prejudicial to the interests of the
Exchangeable Shareholder; or

 

(c)                                  making such changes or corrections which,
on the advice of counsel to Parent, CallCo and the Corporation, are required
for the purpose of curing or correcting any ambiguity or defect or inconsistent
provision or clerical omission or mistake or manifest error, provided that in
the opinion the Board of Directors of each
of Parent, CallCo and the Corporation such changes or  corrections will not be prejudicial to the rights
and interests of the Exchangeable Shareholder.

 

6.3                                 Changes in Capital of Parent and
the Corporation.

 

At all times after the occurrence of any event
contemplated pursuant to section 2.7 or 2.8 of the Exchangeable Share Support Agreement or otherwise, as a result of which
either Parent Common Shares or the  Exchangeable
Shares or both are in any way changed, this exchange agreement shall forthwith
be amended and modified as necessary in order that it shall apply with
full force and effect, mutatis
mutandis,
to all new securities into which Parent Common Shares or the
Exchangeable Shares or both are so changed and the parties hereto shall execute
and deliver a supplemental exchange agreement giving effect to and evidencing
such necessary amendments and modifications.

 

14

 

6.4                                 Execution of Supplemental
Exchange Agreements.

 

Except as permitted under section 6.2, no amendment to
or modification or waiver of any of the provisions
of this exchange agreement otherwise permitted hereunder shall be effective
unless made in writing  and signed by
Parent, CallCo, Corporation and the Exchangeable Shareholder in accordance with
section 6.1.  From time to time
the Corporation (when authorized by a resolution of its Board of Directors),
and Parent (when authorized by a resolution
of its Board of Directors) may, subject to the provisions of these presents,
and they shall, when so directed by these presents, execute and deliver
by their proper officers, exchange agreements or other instruments supplemental
hereto, which thereafter shall form part hereof, for any one or more of the
following purposes:

 

(a)                                  evidencing the succession of Parent
Successors and the covenants of and obligations assumed by each such Parent
Successor in accordance with the provisions of Article 5;

 

(b)                                 making any additions to, deletions from or
alterations of the provisions of this exchange agreement, the Exchange Right or
the Automatic Exchange Rights which are necessary or advisable in order to
incorporate, reflect or comply with any legislation the provisions of which
apply to Parent, the Corporation, or this exchange agreement; and

 

(c)                                  for any other purposes not inconsistent
with the provisions of this exchange agreement, including without limitation,
to make or evidence any amendment or modification to this exchange agreement as
contemplated hereby, provided that the rights of the Exchangeable Shareholder
will not be prejudiced thereby.

 

ARTICLE
7

TERMINATION AND ASSIGNMENT

 

7.1                                 Term.

 

This exchange agreement shall
continue until there are no outstanding Exchangeable Shares held by the Exchangeable Shareholder.

 

ARTICLE
8

GENERAL

 

8.1                                 Severability.

 

If any provision of this
exchange agreement is held to be invalid, illegal or unenforceable, the
validity, legality or
enforceability of the remainder of this exchange agreement shall not in any way
be affected or impaired thereby and the agreement shall be carried out as
nearly as possible in accordance with its original terms and conditions.  Upon such
determination that any term or other provision is invalid, illegal or incapable
of being enforced, the parties hereto shall negotiate in good faith to modify
this exchange agreement so as to effect the original intent of the parties as
closely as possible in an acceptable manner to the end that the transactions
contemplated hereby are fulfilled to the fullest extent possible.

 

15

 

8.2                                 Enurement.

 

This exchange agreement shall be
binding upon and enure to the benefit of the parties hereto and their respective heirs, representatives,
successors and permitted assigns.

 

8.3                                 Notices to Parent and Corporation.

 

All notices and other
communications required or permitted to be delivered to Parent, Cal1Co, or the Corporation under this exchange
agreement shall be in writing and shall be deemed to have been properly
delivered, given or received upon receipt when delivered by hand or two
business days after being sent by registered mail or by courier or by express
delivery service or by facsimile, provided that in each case the notice or communication is sent to the address or
a facsimile telephone number set forth beneath the name of such party
below:

 

(a)                                  if to Parent:

 

Nexsan Corporation

21700 Oxnard Street, Suite 1850 

Woodland Hills, California 91367

 

Attention:  Philip Black 

Telecopier No.: (818) 715-9175

 

(b)                                 if to the Corporation:

 

6360319 Canada Inc.

c/o Nexsan Corporation

21700 Oxnard Street, Suite 1850 

Woodland Hills, California 91367

 

Attention:  Philip Black 

Telecopier No.: (818) 715-9175

 

(c)                                  if to CallCo:

 

6360246 Canada Inc.

c/o Nexsan Corporation

21700 Oxnard Street, Suite 1850 

Woodland Hills, California 91367

 

Attention: Philip Black 

Telecopier No.: (818) 715-9175

 

Any notice or other
communication given personally shall be deemed to have been given and received
upon delivery thereof and if given by telecopy shall be deemed to have been
given and received on the date of receipt
thereof unless such day is not a Business Day in which case it shall be deemed
to have been given and received upon the immediately following Business
Day.

 

16

 

8.4                                 Notice to Exchangeable
Shareholder.

 

Any and all notices to be given
and any documents to be sent to the Exchangeable Shareholder may be  given
or sent to the address of the Exchangeable Shareholder shown on the register of
holders of Exchangeable Shares in any manner permitted by the by-laws of
the Corporation from time to time in force in respect of notices to
shareholders and shall be deemed to be received (if given or sent in such
manner) at the time specified in such by-laws, the provisions of which by-laws
shall apply mutatis
mutandis
to notices or documents as aforesaid sent to the Exchangeable
Shareholder.

 

8.5                                 Risk of Payments by Post.

 

Whenever payments are to be made
or documents are to be sent to the Exchangeable Shareholder by Parent or the Corporation or by the
Exchangeable Shareholder to the Parent, the making of such payment or sending
of such document sent through the post shall be at risk of Parent and the
Corporation, in the case of payments made or documents sent by the Parent or
the Corporation, and at the risk of the Exchangeable Shareholder, in the case
of payments made or documents sent by the Exchangeable Shareholder.

 

8.6                                 Counterparts.

 

This exchange agreement may be
executed in counterparts, each of which shall be deemed an original, but all of which taken together shall
constitute one and the same instrument.

 

8.7                                 Jurisdiction.

 

This exchange agreement shall be
construed and enforced in accordance with the laws of the Province of Ontario and the laws of Canada
applicable therein.

 

8.8                                 Attornment.

 

Parent agrees that any action or
proceeding arising out of or relating to this exchange agreement may  be
instituted in the courts of Ontario, waives any objection which it may have now
or hereafter to the venue of  any such
action or proceeding, irrevocably submits to the jurisdiction of the said
courts in any such action or proceeding.

 

[THE
REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK]

 

17

 

8.9                                 Language.

 

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

 

IN WITNESS WHEREOF the parties hereto
have caused this exchange agreement to be duly executed as of the date first
above written.

 

	
   

  	
  NEXSAN CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
  Per:

  	
  /s/
  Philip Black 

  
	
   

  	
  Name:

  	
  Philip
  Black 

  
	
   

  	
  Title:

  	
  CEO

  
	
   

  	
   

  	
   

  
	
   

  	
  6360319 CANADA INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Per:

  	
  /s/
  Philip Black

  
	
   

  	
  Name:

  	
  Philip
  Black

  
	
   

  	
  Title:

  	
  CEO

  
	
   

  	
   

  	
   

  
	
   

  	
  6360246 CANADA INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  Per:

  	
  /s/
  Philip Black

  
	
   

  	
  Name:
  

  	
  Philip
  Black

  
	
   

  	
  Title:
  

  	
  CEO

  
	
   

  	
   

  	
   

  
	
  Witnessed
  by:

  	
  /s/
  Thomas F. Gosnell 

  
	
   

  	
  Thomas
  F. Gosnell

  

 

18

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