Document:

Amended and Restated Loan and Security Agreement

 Exhibit 10.1 
  

  
 AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT 
  
 BY AND BETWEEN 
  
 CROSSROADS SYSTEMS, INC.

  
 AND 
  
 NEXQL CORPORATION 
  

  
  

 AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT 
  
 This Amended and Restated Loan and Security Agreement (this
“Agreement”) is entered into as of March 22, 2005 (the “Effective Date”), by and between Crossroads Systems, Inc. (“Lender”) and NexQL Corporation
(“Borrower”). 
  
 RECITALS

  
 WHEREAS, Lender and Borrower are parties to that
certain Loan and Security Agreement dated as of December 16, 2003 (the “Prior Agreement”); 
  
 WHEREAS, Borrower notified Lender of Borrower’s intent to prepay all indebtedness due under the Prior Agreement as of August 11, 2004 (the
“Prepayment Amount”), but Borrower agreed to withdraw such pre-payment notice in exchange for Lender’s agreement to rescind its election dated August 23, 2004 to convert the Prepayment Amount into shares of
Borrower’s Common Stock pursuant to the terms of the Prior Agreement and to defer the accrual of interest on the Prepayment Amount; 
  
 WHEREAS, Borrower wishes to obtain additional credit from Lender and Lender desires to extend credit and to convert the currently outstanding
indebtedness under the Prior Agreement in the amount of $1,501,321.53 (consisting of $1,500,000.00 principal amount and $1,321.53 in accrued interest) into 3,002,643 shares of common stock of Borrower; and 
  
 WHEREAS, the parties hereby amend and restate the Prior Agreement in
its entirety pursuant to this terms of this Agreement. 
  
 AGREEMENT 
  
 NOW, THEREFORE, in
consideration of the foregoing premises and certain other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: 
  
 1. DEFINITIONS AND CONSTRUCTION 
  
 (a) Definitions. As used in this Agreement, the following terms shall have the following definitions: 
  
 “Accounts” means all presently existing and
hereafter arising accounts, contract rights, and all other forms of obligations owing to Borrower arising out of the sale or lease of goods (including, without limitation, the licensing of software and other technology) or the rendering of services
by Borrower, whether or not earned by performance, and any and all credit insurance, guarantees, and other security therefor, as well as all merchandise returned to or reclaimed by Borrower and Borrower’s Books relating to any of the foregoing.

  
 “Advance” or
“Advances” means an advance under the Bridge Loan Facility, whether in cash or in the form of services rendered pursuant to each of those certain Manufacturing Agreement and/or Development Agreement; provided that the
amount of an Advance in the form of services under the Manufacturing Agreement or the Development Agreement shall be the amount set forth on the invoice of Borrower relating to such services. 

 “Affiliate” means, with respect to any Person, any Person that owns or controls
directly or indirectly such Person, any Person that controls or is controlled by or is under common control with such Person, and each of such Person’s senior executive officers, directors and partners. 
  
 “Borrower’s Books” means all of Borrower’s
books and records including: ledgers; records concerning Borrower’s assets or liabilities, the Collateral, business operations or financial condition; and all computer programs, or tape files, and the equipment containing such information.

  
 “Borrower Common Stock” means the
Common Stock of Borrower, par value $0.001 per share. 
  
 “Borrower Event of Default” shall have the meaning given such term in Section 9. 
  
 “Bridge Loan Facility” means the facility under which Borrower may request Lender to loan up to the Committed Loan Amount as
specified in Section 3. 
  
 “Business
Day” means any day that is not a Saturday, Sunday or other day on which banks in the State of Texas are authorized or required to close. 
  
 “Collateral” means the property described on Schedule III attached hereto. 
  
 “Committed Loan Amount” means $2,000,000.

  
 “Contingent Obligation” means, as
applied to any Person, any direct or indirect liability, contingent or otherwise, of that Person with respect to (i) any indebtedness, lease, dividend, letter of credit or other obligation of another, including without limitation, any such
obligation directly or indirectly guaranteed, endorsed, co-made or discounted or sold with recourse by that Person, or in respect of which that Person is otherwise directly or indirectly liable; (ii) any obligations with respect to undrawn letters
of credit issued for the account of that Person; and (iii) all obligations arising under any interest rate, currency or commodity swap agreement, interest rate cap agreement, interest rate collar agreement, or other agreement or arrangement intended
to protect a Person against fluctuation in interest rates, currency exchange rates or commodity prices; provided, however, that the term “Contingent Obligation” shall not include endorsements for collection or deposit in the
ordinary course of business. The amount of any Contingent Obligation shall be deemed to be an amount equal to the stated or determined amount of the primary obligation in respect of which such Contingent Obligation is made or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof as determined by such Person in good faith; provided, however, that such amount shall not in any event exceed the maximum amount of the obligations under the
guarantee or other support arrangement. 
  

 2 

 “Copyrights” means any and all copyrights, copyright applications, copyright
registrations and like protections in each work or authorship and derivative work thereof, whether published or unpublished and whether or not the same also constitutes a trade secret, now or hereafter existing, created, acquired or held.

  
 “Copyright Security Agreement” means
a security agreement granting Lender a security interest in all Copyrights owned by Borrower, in form and substance satisfactory to Lender and acceptable for filing with the United States Copyright Office. 
  
 “Disclosure Schedule” means the disclosure schedule
attached hereto as Schedule I. 
  
 “Development
Agreement” means that certain Development Agreement dated as of December 16, 2003, by and between Borrower and Lender, as amended, superseded or restated from time to time. 
  
 “Equipment” means all present and future machinery, equipment, tenant, improvements, furniture,
fixtures, vehicles, tools, parts and attachments in which Borrower has any interest. 
  
 “GAAP” means generally accepted accounting principles, consistently applied, as in effect from time to time in the United States of America. 
  
 “Indebtedness” means (i) all indebtedness for money
borrowed or the deferred purchase price of property or services, including without limitation, reimbursement and other obligations with respect to surety bonds and letters of credit, (ii) all obligations evidenced by notes, bonds, debentures or
similar instruments, (iii) all capital lease obligations and (iv) all Contingent Obligations. 
  
 “Insolvency Proceeding” means any proceeding commenced by or against any Person under any provision of the United States Bankruptcy Code, as amended, or under any other bankruptcy or insolvency
law, including assignments for the benefit of creditors, formal or informal moratoria, compositions, extensions generally with its creditors, or proceedings seeking reorganization, arrangement or other relief. 
  
 “Intellectual Property” means any and all right,
title and interest of Borrower in the following: 
  
 (i) Copyrights, Trademarks and Patents; 
  
 (ii) all trade secrets, and any and all intellectual property rights in computer software and computer software products now or hereafter existing, created, acquired or held; 
  
 (iii) all design rights that may be available to Borrower or hereafter existing, created, acquired or held;

  

 3 

 (iv) all claims for damages by way of past, present and future infringement of any of the
rights included above, with the right, but not the obligation, to sue for and collect such damages for said use or infringement of the intellectual property rights identified above; 
  
 (v) all licenses or other rights to use any of the Copyrights, Patents or Trademarks, and all license fees
and royalties arising from such use to the extent permitted by such license or rights; 
  
 (vi) all amendments, renewals and extensions of any Copyrights, Trademarks or Patents; and 
  
 (vii) all proceeds and products of the foregoing, including
without limitation, all payments under insurance or any indemnity or warranty payable in respect of any of the foregoing. 
  
 “Intellectual Property Security Agreements” means the Patent Security Agreement, the Copyright Trademark Agreement and the
Trademark Security Agreement. 
  
 “Inventory” means all present and future inventory in which Borrower has any interest, including, merchandise, raw materials, parts, supplies, packing and shipping materials, work in process and finished products
intended for sale or lease or to be furnished under a contract of service, of every kind and description now or at any time hereafter owned or in the custody or possession (whether actual or constructive) of Borrower, including such inventory as is
temporarily out of its custody or possession in transit and including any returns upon any accounts or other proceeds, including insurance proceeds, resulting from the sale or disposition of any of the foregoing and any documents of title
representing any of the above, and Borrower’s Books relating to any of the foregoing. 
  
 “Investment” means any beneficial ownership of (including stock, partnership interests or other securities) any Person, or any loan, advance or capital contribution to any Person. 

 
 “Lender Event of Default” means the failure of
Lender to make an Advance if all of the conditions of Section 3(e) are met; provided, and only if, such failure continues for a period of 30 days after written notice from Borrower to Lender of such default. 
  
 “Lender Expenses” means all reasonable third party
costs and expenses (including reasonable attorney’s fees and expenses) incurred by Lender in connection with the enforcement or defense of the Loan Documents or the preservation of the Collateral. 
  
 “Lien” means any mortgage, lien, deed of trust,
charge, pledge, security interest or other encumbrance. 
  
 “Loan Documents” means, collectively, this Agreement, the Warrant, the Note, the Agreement of even date herewith, by and between Borrower and Lender attached hereto as Exhibit A, and any other agreement
entered into between Borrower and Lender in connection with this Agreement, all as amended or extended from time to time. 
  

 4 

 “Manufacturing Agreement” means that certain Manufacturing Agreement dated as of
December 9, 2004, by and between Borrower and Lender, as amended, superseded or restated from time to time. 
  
 “Material Adverse Effect” means a material adverse effect on (i) the business operations or condition (financial or otherwise) of
Borrower and its Subsidiaries taken as a whole or (ii) the ability of Borrower to repay the Obligations or otherwise perform its obligations under the Loan Documents. 
  
 “Maturity Date” means the earliest to occur of: 
  
 (i) March 15, 2006; provided that in the event that
the Maturity Date is triggered solely as a result of the occurrence of the foregoing date and Lender has not elected to exercise the Conversion Option with respect to the full amount of Obligations then-outstanding hereunder, Lender agrees that it
will not demand payment under this Agreement or the Note (nor initiate or threaten to initiate any Insolvency Proceedings against Borrower) until March 15, 2007; provided, however, that such forbearance shall only be effective for so long as:
(A) Borrower is actively seeking alternate purchasers of shares of its capital stock to consummate a Qualified Financing; (B) no other Insolvency Proceeding has been initiated by or against Borrower; (C) no Liquidation Event (as defined below in
clause (ii) of this definition) has occurred nor has Borrower agreed to or become bound with respect to a Liquidation Event, whether by definitive agreement or letter of intent, orally or in writing; and (D) no Borrower Event of Default has occurred
(other than a “Payment Default” under Section 9(a)). 
  
 (ii) any liquidation, dissolution or winding up of Borrower, either voluntary or involuntary, and shall be deemed to be occasioned by, or to include, (A) the acquisition of Borrower by another entity by means of any
transaction or series of related transactions (including, without limitation, any reorganization, merger or consolidation) unless Borrower’s stockholders of record as constituted immediately prior to such acquisition will, immediately after
such acquisition (by virtue of securities issued as consideration for Borrower’s acquisition or otherwise) hold at least 50% of the voting power of the surviving or acquiring entity (except that the sale by Borrower of shares of its capital
stock to investors in bona fide common stock or preferred stock financing transactions shall not be deemed an acquisition for this purpose); (B) the sale of all or substantially all of the assets of Borrower, including the sale of all or
substantially all of the assets of Borrower’s subsidiaries, if such assets constitute substantially all of the assets of Borrower and such subsidiaries taken as a whole; or (C) the grant of an exclusive irrevocable license of substantially all
of Borrower’s intellectual property (any event set forth in this clause (ii) being referred to as a “Liquidation Event”); and 
  
 (iii) a Qualified Financing. 
  
 “Negotiable Collateral” means all of Borrower’s present and future letters of credit of which it is a beneficiary, notes,
drafts, instruments, securities, documents of title and chattel paper, and Borrower’s Books relating to any of the foregoing. 
  

 5 

 “NexQL Holdings” means NexQL Holdings, LLC, a Texas limited liability company.

  
 “Note” means the Secured Convertible
Promissory Note, substantially in the form attached hereto as Exhibit B, which shall evidence any Advances made pursuant to this Agreement. 
  
 “Obligations” means all debt, principal, interest, Lender Expenses and other amounts owed to Lender by Borrower pursuant to this
Agreement or any other Loan Document, whether absolute or contingent, due or to become due, now existing or hereafter arising, including, any interest that accrues after the commencement of an Insolvency Proceeding and including any debt, liability
or obligation owing from Borrower to others that Lender may have obtained by assignment or otherwise. 
  
 “Patents” means, collectively, (i)all patents and patent applications, including the inventions and improvements described and
claimed therein, and all patentable inventions, (ii) all reissues, divisions, continuations, renewals, extensions and continuations-in-part thereof, and (iii) all rights, licenses and goodwill, now existing or hereafter coming into existence, (A) to
all income, profits, royalties, damages and payments now or hereafter due and/or payable under and with respect thereto, including damages and payments for past, present or future infringements thereof, (B) to sue for past, present and future
infringements thereof, and (C) otherwise accruing under or pertaining to any of the foregoing throughout the world. 
  
 “Patent Security Agreement” means an agreement substantially in the form annexed hereto as Exhibit D. 
  
 “Permitted Indebtedness” means: 
  
 (i) Indebtedness of Borrower in favor of Lender arising
under this Agreement or any other Loan Document; 
  
 (ii) Indebtedness existing on the date of this Agreement as set forth on Schedule IV; 
  
 (iii) Indebtedness to trade creditors incurred in the ordinary course of business ; and 
  
 (iv) Subordinated Debt. 
  
 “Permitted Investment” means: 
  
 (i) Investments existing on the date hereof disclosed in the
Disclosure Schedule; and 
  
 (ii) (A) marketable
direct obligations issued or unconditionally guaranteed by the United States of America or any agency or and State thereof maturing within one year from the date of acquisition thereof and (B) certificates of deposit maturing no more than one year
from the date of investment therein issued by Lender. 
  

 6 

 “Permitted Liens” means: 
  
 (i) any Liens existing on the date of this Agreement and
disclosed on the Disclosure Schedule or arising under this Agreement or the other Loan Documents; 
  
 (ii) Liens for taxes, fees, assessments or other governmental charges or levies, either not delinquent or being contested in good faith by
appropriate proceedings; provided that the same have no priority over any of Lender’s security interests; 
  
 (iii) Liens (A) upon or in any equipment acquired or held by Borrower or any of its Subsidiaries to secure the purchase price of such
equipment or indebtedness insured solely for the purpose of financing the acquisition of such equipment or (B) existing on such equipment at the time of its acquisition; provided that the Lien is confined solely to the property so acquired
and improvements thereon, and the proceeds of such equipment; 
  
 (iv) Liens incurred in connection with the extension, renewal or refinancing of the indebtedness secured by Liens of the type described in clauses (i) and (iii) above; provided that any extension, renewal or
replacement Lien shall be limited to the property encumbered by the existing Lien and the principal amount of the indebtedness being extended, renewed or refinanced does not increase; and 
  
 (v) Liens arising by operation of law imposed without action
of the holders thereof; provided that payment of the underlying Indebtedness is not yet required. 
  
 “Person” means any individual, sole proprietorship, partnership, limited liability company, joint venture, trust, unincorporated
organization, association, corporation, institution, public benefit corporation, firm, joint stock company, estate, entity or governmental agency. 
  
 “Qualified Financing” means the next equity financing of Borrower after the date hereof in which Borrower sells shares of its
capital stock resulting in gross proceeds to Borrower (including any amounts converted pursuant to the terms of the Note) of at least $5,000,000, excluding proceeds received upon the exercise of stock options issued to employees or service providers
of Borrower. 
  
 “Responsible Officer”
means the Chief Executive Officer. 
  
 “Services
Advances” means Advances resulting from invoiced services under the Manufacturing Agreement and the Development Agreement. 
  
 “Subordinated Debt” means any debt incurred by Borrower that is subordinated to the debt owing by Borrower to Lender on terms
acceptable to Lender in its sole discretion (and identified as being such by Borrower and Lender). 
  

 7 

 “Subsidiary” means any entity in which Borrower owns, either directly or through
an Affiliate, (i) any general partnership interest or (ii) more than 50% of voting power of such entity. 
  
 “Tax Code” means the Internal Revenue Code of 1986, as amended and the rules and regulations promulgated thereunder. 

 
 “Trademarks” means, collectively, (i) all trade
names, trademarks and service marks, logos, trademark and service mark registrations, and applications for trademark and service mark registrations, (ii) all renewals of trademark and service mark registrations, and (iii) all rights (A) to all
income, royalties, damages and other payments (including in respect of all past, present and future infringements) with respect to any of the foregoing, (B) to sue for all past, present and future infringements thereof, and (C) otherwise accruing
under or pertaining to any of the foregoing, together, in each case, with the product lines and goodwill of the business connected with the use of, and symbolized by, each such trade name, trademark and service mark. 
  
 “Trademark Security Agreement” means a security
agreement granting Lender a security interest in all Trademarks owned by Borrower in form and substance satisfactory to Lender and acceptable for filing with the United States Patent and Trademark Office. 
  
 “UCC” means the Uniform Commercial Code as in effect
in the State of Texas. 
  
 “Warrant”
means the warrant to purchase capital stock of Borrower to be issued to Lender pursuant to this Agreement, in the form attached hereto as Exhibit C. 
  
 (b) Accounting Terms. All accounting terms not specifically defined herein shall be construed in accordance with GAAP and all calculations made
hereunder shall be made in accordance with GAAP. When used herein, the terms “financial statements” shall include the notes and schedules thereto. 
  
 2. CONVERSION OF INDEBTEDNESS UNDER PRIOR AGREEMENT 
  
 Immediately upon the effectiveness of this Agreement, the currently outstanding indebtedness of Borrower to Lender under the Prior Agreement in the
aggregate amount of $1,501,321.53 (which amount includes $1,500,000.00 in principal and $1,321.53 in accrued and unpaid interest) shall be converted into 3,002,643 fully paid and non-assessable shares (the “Shares”) of
Borrower Common Stock. Together with the delivery to Lender of an executed copy of this Agreement, Borrower shall also deliver to Lender a stock certificate representing the Shares. 
  
 3. LOAN AND TERMS OF PAYMENT 
  
 (a) General. Subject to and upon the terms and conditions of this Agreement, Borrower may request and Lender agrees
to make, upon the terms and conditions provided herein, one or more Advances from Lender from time to time through the Maturity Date in an aggregate amount up to the Committed Loan Amount. Any Advances made pursuant to this Agreement shall be
evidenced by the Note, executed by Borrower in favor of Lender 
  

 8 

 (b) Advances. The obligation of Lender to make any Advance (other than a Services Advance) shall
be subject to the conditions set forth in Section 3(e) below. Borrower may request that Lender make an Advance other than a Services Advance by delivering to Lender a Request for Advance in the form attached as Exhibit A to the Note (the
“Request for Advance”). Each such Advance shall be noted on Schedule I to the Note and no interest shall begin to accrue thereon unless and until such Advance amount is actually advanced to Borrower. 
  
 (c) Use of Proceeds. The proceeds from the Bridge Loan Facility shall
be used by Borrower for working capital purposes. 
  
 (d)
Prepayment. Borrower shall not be entitled to prepay any amount owed to Lender pursuant to this Agreement without the prior written consent of Lender. 
  
 (e) Conditions Precedent to Advances. The obligation of Lender to make any Advance (other than a Services Advance) is subject to Lender having
received from Borrower a completed Request for Advance executed by a Responsible Officer of Borrower, which shall contain the certification of Borrower that (i) the representations and warranties of Borrower set forth in Section 4 are true and
correct as of the date of the Request for Advance; (ii) there exists no Borrower Event of Default and no event that, but for the passage of time or the giving of notice, or both, would constitute a Borrower Event of Default; and (iii) a majority of
the board of directors of Borrower, including at least one director designated by Lender has approved the budget for the fiscal quarter in which Borrower requests the Advance or has otherwise agreed in writing to the Advance. 
  
 (f) Issuance of Warrant. Together with the execution and delivery of
this Agreement, Borrower shall issue to Lender a Warrant in the form attached hereto as Exhibit C. 
  
 4. REPRESENTATIONS AND WARRANTIES OF BORROWER 
  
 Borrower represents and warrants to Lender that, except as set forth in the Disclosure Schedule, which statements and other items set forth in the
Disclosure Schedule shall be deemed to be representations and warranties as if made hereunder and shall be arranged to correspond to the paragraphs contained in this Section 4: 
  
 (a) Organization and Qualification. Borrower is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of Delaware and is duly licensed or qualified to transact business as a foreign corporation and is in good standing in each jurisdiction in which the nature of the business transacted by it or the character of
the properties owned or leased by it requires such licensing or qualification, except where the failure to be so licensed or qualified would not have a Material Adverse Effect. 
  
 (b) Authorization. 
  
 (i) The execution and delivery by the Company of this Agreement and the other Loan Documents, the performance by the Company of its
obligations hereunder 
  

 9 

 and thereunder and the issuance, sale and delivery of the Notes and Warrants have been duly authorized by
all requisite corporate action and will not violate any provision of law, any order of any court or other agency of government, Borrower’s current Certificate of Incorporation or Borrower’s current By-laws, or any provision of any
indenture, agreement or other instrument to which Borrower or any of its properties or assets is bound, or conflict with, result in a breach of or constitute (with due notice or lapse of time or both) a default under any such indenture, agreement or
other instrument, or result in the creation or imposition of any lien, charge, restriction, claim or encumbrance of any nature whatsoever upon any of Borrower’s properties or assets. 
  
 (ii) The Note and Warrant have been duly authorized and,
when issued in accordance with this Agreement, will be free and clear of all liens, charges, restrictions, claims and encumbrances imposed by or through Borrower. The shares of capital stock issuable upon conversion of the Note and exercise of the
Warrant (and the shares of underlying capital stock, in the event the shares of capital stock issued with respect to the Note and/or warrant are convertible securities), `when so issued, will be duly authorized, validly issued, fully paid and
nonassessable shares of capital stock and will be free and clear of all liens, charges, restrictions, claims and encumbrances imposed by or through Borrower, except for transfer restrictions imposed by (A) applicable securities laws or (B) any other
applicable agreement between Borrower and Lender. 
  
 (c)
Litigation. There is no action, suit, proceeding or investigation pending or, to Borrower’s knowledge, threatened against Borrower, its assets or any of its officers, directors, or employees in connection with such officer’s,
director’s or employee’s relationship `with, or actions taken on behalf of Borrower. Borrower is not a party or subject to the provisions of any order, writ, injunction, judgment or decree of any court or government agency or
instrumentality. There is no action, suit, proceeding or investigation by Borrower currently pending or that Borrower intends to initiate. 
  
 (d) Governmental Approvals. No registration or filing with, or consent or approval of or other action by, any federal, state or other governmental
agency or instrumentality is or will be necessary for the valid execution, delivery and performance by Borrower of this Agreement or the other Loan Documents, including the issuance, sale and delivery of the Note or Warrant or, upon exercise or
conversion thereof, the issuance and delivery of the shares of capital stock upon conversion or exercise thereof, other than filings pursuant to state securities laws (all of which filings have been made by Borrower, other than those that are
required to be made after the Closing and which will be duly made on a timely basis) in connection with the issuance of the Note and Warrant.  
  
 (e) Intellectual Property. 
  
 (i) Borrower does not own any Patents, Trademarks or Copyrights registered in, or the subject of pending applications in, the United
States Patent and Trademark Office or the United States Copyright Office or any similar offices or agencies in any other country or any political subdivision thereof, other than those described on Schedule II hereto; 
  

 10 

 (ii) Borrower has, except for Permitted Liens, the sole, full and unencumbered right,
title and interest in and to the Trademarks shown on Schedule II and the goods and services covered by the registrations thereof and, to the extent registered, such registrations are valid and enforceable and in full force and effect;

  
 (iii) Borrower has, except for Permitted
Liens, the sole, full and unencumbered right, title and interest in and to each of the Patents shown on Schedule II and the registrations thereof are valid and enforceable and in full force and effect; 
  
 (iv) Borrower has, except for Permitted Liens, the sole,
full and unencumbered right, title and interest in and to each of the Copyrights shown on Schedule II and according to the records of the United States Copyright Office, each of said copyrights is valid and enforceable and in full force and
effect; 
  
 (v) There is no claim by any third
party that any Patents, Trademarks, or Copyrights shown on Schedule II are invalid and unenforceable or does or may violate the rights of any Person; 
  
 (vi) All licenses (other than non-exclusive licenses to end-users entered into in the ordinary course of business) of Patents, Trademarks,
Copyrights and trade secrets which Borrower has granted to any Person are set forth in Schedule II hereto; 
  
 (vii) All licenses of Patents, Trademarks, Copyrights and trade secrets which any Person has granted to Borrower are set forth on
Schedule II hereto; 
  
 (viii) Borrower
has obtained from each employee who may be considered the inventor of patentable inventions (invented within the scope of such employee’s employment) an assignment to Borrower of all rights to such inventions, including Patents; and 

 
 (ix) Borrower has taken all reasonable steps necessary or
advisable to protect the secrecy and the validity under applicable law of all material trade secrets. 
  
 (f) Capitalization. The authorized capital stock of Borrower consists, or will consist immediately prior to the Closing, of: 
  
 (i) Common Stock. 16,750,000 shares of common stock,
par value $0.001 per share (“Common Stock”), of which 8,000,000 shares are issued and outstanding prior to giving effect to issuance of 3,002,643 shares of Common Stock to Lender pursuant to Section 2, and 2,000,000 shares
have been reserved for issuance under Borrower’s 2003 Stock Option Plan, the form of which has been provided to and approved by the Investor and its counsel prior to the execution of this Agreement. 
  
 (ii) Preferred Stock. 3,250,000 shares of preferred
stock, par value $0.001, none of which shares are issued and outstanding. 
  
 (iii) The outstanding shares of Common Stock are owned by the stockholders and in the numbers specified in Section 4(f)(iii) of the Disclosure Schedule. 
  

 11 

 (iv) The outstanding shares of Common Stock are all duly and validly authorized and
issued, fully paid and nonassessable, and were issued in compliance with all applicable state and federal laws concerning the issuance of securities. 
  
 (v) Except for the rights provided in Section 3.3 of that certain Investor’s Rights Agreement between Borrower and Lender, there are
not outstanding any options, warrants, rights (including conversion or preemptive rights) or agreements for the purchase or acquisition from Borrower of any shares of its capital stock. Borrower is not a party or subject to any agreement or
understanding, and, to Borrower’s knowledge, there is no agreement or understanding between any persons and/or entities, which affects or relates to the voting or giving of written consents with respect to any security or by a director of
Borrower. 
  
 5. CREATION OF SECURITY INTEREST 

 
 (a) Grant of Security Interest. Borrower grants and pledges to
Lender a continuing security interest in all presently existing and hereafter acquired or arising Collateral in order to secure prompt repayment of any and all Obligations and in order to secure prompt performance by Borrower of each of its
covenants and duties under the Loan Documents. Except as set forth in the Disclosure Schedule, such security interest constitutes a valid, first priority security interest in the presently existing Collateral, and will constitute a valid, first
priority security interest in Collateral acquired after the date hereof. 
  
 (b) Perfection. 
  
 (i) Prior to or concurrently with the execution and delivery of this Agreement, Borrower shall file or cause to be filed such financing statements and other documents in such offices as shall be necessary or as Lender may reasonably request
to perfect and establish priority (subject only to Permitted Liens) of the security interest granted herein. When financing statements and other filings in appropriate form are filed and upon the taking of possession or control by Lender of the
Collateral with respect to which a security interest may be perfected only by possession or control (which possession or control shall be given to Lender to the extent possession or control by Lender is required by this Agreement), the Lien created
by this Agreement shall constitute a fully perfected Lien on, and security interest in, all right, title and interest of Borrower in the Collateral (other than (A) the Intellectual Property and (B) such Collateral in which a security interest cannot
be perfected under the UCC as in effect at the relevant time in the relevant jurisdiction), in each case subject to no Liens other than Permitted Liens. 
  
 (ii) On the date hereof, Borrower will execute and deliver to Lender the Patent Security Agreement with respect to all Patents then owned
by it. Upon the request of Lender, it will sign and deliver to Lender any Intellectual Property Security Agreement necessary to grant security interests in any Intellectual Property owned by it at such time that are not covered by the security
interests granted in any previous Intellectual Property Security Agreements so executed and delivered by it. In each case, it shall promptly make all Intellectual Property filings necessary to record the security 
  

 12 

 interests in such Intellectual Property. Borrower hereby appoints the Lender as its attorney-in-fact to
execute and file all Intellectual Property filings required or so requested for the foregoing purposes, all acts of such attorney being hereby ratified and confirmed; and such power, being coupled with an interest, shall be irrevocable until the
Collateral is released. 
  
 (c) When the Patent Security Agreement
is filed in the United States Patent and Trademark Office, the Lien created by this Agreement shall constitute a fully perfected Lien on, and security interest in, all right, title and interest of the grantors thereunder in the Patents which are
registered in the United States, in each case subject to no Liens other than Permitted Liens. 
  
 (d) Delivery of Additional Documentation. Borrower shall from time to time execute and deliver to Lender, at the request of Lender, all Negotiable
Collateral, all financing statements and other documents that Lender may reasonably request, in form satisfactory to Lender, to perfect and continue perfected Lender’s security interest in the Collateral and in order to fully consummate all of
the transactions contemplated under the Loan Documents. 
  
 6.
AFFIRMATIVE COVENANTS 
  
 Borrower covenants and agrees
that, until payment in full of all outstanding Obligations, and for so long as Lender may have any commitment to make Advances hereunder, Borrower shall do all of the following: 
  
 (a) Good Standing. Borrower shall maintain its and each of its Subsidiaries’ corporate existence and good
standing in its jurisdiction of incorporation and maintain qualification in each jurisdiction in which the failure to so qualify could have a Material Adverse Effect. Borrower shall maintain, and shall cause each of its Subsidiaries to maintain, to
the extent consistent with prudent management of Borrower’s business, in force and effect all licenses, approvals and agreements, the loss of which could have a Material Adverse Effect. 
  
 (b) Taxes. Borrower shall make, and shall cause each Subsidiary to
make, due and timely payment or deposit of all material federal, state and local taxes, assessments or contributions required of it by law, and will execute and deliver to Lender, on demand, appropriate certificates attesting to the payment or
deposit thereof; and Borrower will make, and will cause each Subsidiary to make, timely payment or deposit of all material tax payments and withholding taxes required of it by applicable laws, including, those laws concerning F.I.C.A, F.U.T.A, state
disability, and federal, state and local income taxes, and will, upon request, furnish to Lender proof satisfactory to Lender confirming that Borrower or a Subsidiary has made such payments or deposits; provided that Borrower or a Subsidiary
need not make any payment if the amount or validity of such payment is contested in good faith by appropriate proceedings and is reserved against (to the extent required by GAAP) by Borrower. 
  
 (c) Further Assurances. At any time and from time to time, Borrower
shall execute and deliver such further instruments and take such further action as may be reasonably requested by Lender to effect the purposes of this Agreement and the other Loan Documents. 
  

 13 

 7. COVENANTS REGARDING INTELLECTUAL PROPERTY 
  
 Until payment in full of all outstanding Obligations, and for so long as
Lender may have any commitment to make Advances hereunder, Borrower hereby covenants and agrees as follows: 
  
 (a) Borrower will perform all acts and execute all documents, including notices of security interest for each relevant type of Intellectual Property in
forms suitable for filing with the United States Patent and Trademark Office or the United States Copyright Office, that may be necessary or desirable to record, maintain, preserve, protect and perfect Lender’s interest in the Collateral, the
Lien granted to Lender in the Collateral and the first priority of such Lien; 
  
 (b) Except to the extent that Lender gives its prior written consent: 
  
 (i) Borrower (either itself or through licensees) will continue to use its material Trademarks in connection with each and every Trademark
class of goods or services applicable to its current line of products or services as reflected in its current catalogs, brochures, price lists or similar materials in order to maintain such Trademarks in full force and effect free from any claim of
abandonment for nonuse, and Borrower will not (and will not permit any licensee thereof to) do any act or knowingly omit to do any act whereby any material Trademark may become invalidated; 
  
 (ii) Borrower will not do any act or omit to do any act
whereby any material Patent registrations may become abandoned or dedicated to the public domain or the remedies available against potential infringers weakened and shall notify Lender immediately if it knows of any reason or has reason to know that
any material Patent registration may become abandoned or dedicated; and 
  
 (iii) Borrower will not do any act or omit to do any act whereby any material Copyrights may become abandoned or dedicated to the public domain or the remedies available against potential infringers weakened and shall
notify Lender immediately if it knows of any reason or has reason to know that any material Copyright may become abandoned or dedicated to the public domain. 
  
 (c) Borrower will promptly (and in any event within five (5) calendar days) notify Lender upon the filing, either by Borrower or through any agent,
employee, licensee or designee, of (i) an application for the registration of any Patent or Trademark, with the United States Patent and Trademark Office or any similar office or agency in any other country or any political subdivision thereof, (ii)
any assignment of any Patent or Trademark, which Borrower may acquire from a third party, with the United States Patent and Trademark Office or any similar office or agency in any other country or any political subdivision thereof, or (iii) any
assignment of any Copyright, which Borrower may acquire from a third party, with the Untied Sates Copyright Office or any similar office or agency in any other country or any political subdivision thereof. Upon the request of Lender, Borrower shall
execute and deliver any and all agreements, instruments, documents and papers as Lender may request to evidence Lender’s security interest in such Patent, Trademark and Copyright (and the goodwill and general 
  

 14 

 intangibles of Borrower relating thereto or represented thereby), and Borrower authorizes Lender to amend an original
counterpart of the applicable notice of security interest executed pursuant to Section 7(a) of this Agreement without first obtaining Borrower’s approval of or signature to such amendment and to record such document with the United States
Patent and Trademark Office or Untied Sates Copyright Office, as applicable; 
  
 (d) Borrower will promptly (and in any event within five (5) calendar days) notify Lender upon the filing, either by Borrower or through any agent, employee, licensee or designee, of any Copyright registration with
the United States Copyright Officer with respect to any proprietary software of Borrower or any other property that is subject to registration with the United States Copyright Office; 
  
 (e) Borrower will take all necessary steps in any proceeding before the United States Patent and Trademark Office, the
Untied Sates Copyright Office or any similar office or agency in any other country or any political subdivision thereof, to diligently prosecute or maintain, as applicable, each application and registration of the Patents, Trademarks and Copyrights,
including filing of renewals, affidavits of use, affidavits of incontestability and opposition, interference and cancellation proceedings (except to the extent that dedication, abandonment or invalidation is permitted hereunder); 
  
 (f) Borrower shall (i) use proper statutory notice in connection with its use
of the Patents, Trademarks and Copyrights, (ii) maintain consistent standards of quality in its manufacture of products sold under the Trademarks or provision of services in connection with the Trademarks, and (iii) take all steps necessary to
protect the secrecy and the validity under applicable law of all material trade secrets; 
  
 (g) Borrower agrees that if it learns of any use by any Person of any term or design likely to cause confusion with any Trademark, Borrower shall promptly notify Lender of such use and of all steps taken and to be
taken to remedy any infringement of any Trademark; and 
  
 (h)
Borrower shall maintain with each employee who may have access to the trade secrets of Borrower an agreement by which such employee agrees not to disclose such trade secrets and with each employee who may be the inventor of patentable inventions
(invented within the scope of such employee’s employment) an invention assignment agreement requiring such employee to assign all rights to such inventions, including Patents and Patent applications, to Borrower and further requiring such
employee to cooperate fully with Borrower, its successors in interest, including Lender, and their counsel, in the prosecution of any Patent application or in any litigation involving the invention, whether such cooperation is required during such
employee’s employment with Borrower or after the termination of such employment. 
  
 (i) For the purpose of enabling Lender to exercise rights and remedies under Section 9 at such time as Lender shall be lawfully entitled to exercise such rights and remedies, and for no other purpose, Borrower hereby
grants to Lender, to the extent assignable, an irrevocable, non-exclusive license (exercisable without payment of royalty or other compensation to Borrower) to use, assign, license or sublicense any of the Intellectual Property now owned or
hereafter acquired by Borrower, wherever the same may be located, including in 
  

 15 

 such license reasonable access to all media in which any of the licensed items may be recorded or stored and to all
computer programs used for the compilation or printout thereof; provided, however, such license shall only be effective during the existence of an Event of Default. 
  
 8. NEGATIVE COVENANTS 
  
 Borrower covenants and agrees that, so long as any credit hereunder shall be available and until payment in full of all outstanding Obligations, and for
so long as Lender may have any commitment to make Advances hereunder, Borrower will not do any of the following without the prior written consent of Lender; provided, however, Borrower may enter into other transactions to permit the repayment
of Obligations after a Lender Event of Default: 
  
 (a)
Dispositions. Convey, sell, lease, transfer or otherwise dispose of (collectively, “Transfer”), or permit any of its Subsidiaries to Transfer, all or any part of its business or property, other than: (i) Transfers of
Inventory or other property that do not in the aggregate have a fair market value in excess of $5,000 and which is consistent with Borrower’s past business practices and occurs in the ordinary course of business; (ii) Transfers of non-exclusive
licenses and similar arrangements for the use of the property of Borrower or its Subsidiaries; and (iii) Transfers of worn-out or obsolete Equipment or new Equipment financed by other vendors. 
  
 (b) Change in Business. Engage in any business, or permit any of its
Subsidiaries to engage in any business, other than the business currently engaged in by Borrower and any business substantially similar or related thereto (or incidental thereto) or suffer a change in control other than the distribution of
Borrower’s stock from NexQL Holdings to its members. Borrower will not, without 30-days prior written notification to Lender, relocate its principal office. 
  
 (c) Mergers or Acquisitions. Merge or consolidate, or permit any of its subsidiaries to merge or consolidate, with or
into any other business organization, or acquire, or permit any of its Subsidiaries to acquire, all or substantially all of the capital stock or property of another Person in a transaction, or enter into any or become bound to effect any Liquidation
Event. 
  
 (d) Indebtedness. Create, incur, assume or be or
remain liable with respect to any indebtedness, or permit any Subsidiary so to do, other than Permitted Indebtedness. 
  
 (e) Encumbrances. Create, incur, assume or suffer to exist any Lien with respect to any of its property, or assign or otherwise convey any right to
receive income, including the sale of any Accounts, or permit any of its Subsidiaries so to do, except for Permitted Liens. 
  
 (f) Investments. Directly or indirectly acquire or own, or make any Investment in any Person, or permit any of its Subsidiaries so to do, other
than Permitted Investments. 
  
 (g) Transactions with
Affiliates. Directly or indirectly enter into or permit to exist any material transaction with any Affiliate of Borrower (other than Lender) or transfer, pay, loan or otherwise obligate Borrower to give cash, services, assets or other items of
value to NexQL Holdings or to its members or commit to do any of the preceding after the date hereof. 
  

 16 

 (h) Intellectual Property Agreements. Borrower shall not permit the inclusion in any material
contract to which it becomes a party of any provisions that could or might in any way prevent the creation of a security interest in Borrower’s rights and interests in any property included within the definition of the Intellectual Property
acquired under such contracts, except to the extent that such provisions are necessary in Borrower’s exercise of its reasonable business judgment. 
  
 (i) Subordinated Debt. Make any payment in respect of any Subordinated Debt, or permit any of its Subsidiaries to make any such payment, except in
compliance with the terms of such Subordinated Debt, or amend any provision contained in any documentation relating to the Subordinated Debt without Lender’s prior written consent. 
  
 9. EVENTS OF DEFAULT 
  
 Any one or more of the following events shall constitute a “Borrower Event of Default” under this Agreement: 
  
 (a) Payment Default. If Borrower fails to pay the principal of, or
any interest on, the Advance, when due and payable on the Maturity Date; or fails to pay any portion of any other Obligations not constituting such principal or interest, including without limitation Lender Expenses, within 30 days of receipt by
Borrower of a written demand for payment from Lender; 
  
 (b)
Covenant Default. If Borrower violates any of the covenants contained in Article 7 of this Agreement, or fails or neglects to perform, keep, or observe any other material term, provision, condition, covenant, or agreement contained in this
Agreement, in any of the Loan Documents and has failed to cure such default within 30 days after Borrower receives notice thereof or any officer of Borrower becomes aware thereof; provided, however, that if the default cannot by its nature be
cured within such 30-day period or cannot after diligent attempts by Borrower be cured within such 30-day period, and such default is likely to be cured within a reasonable time, then Borrower shall have an additional reasonable period (which shall
not in any case exceed 30 days) to attempt to cure such default, and within such reasonable time period the failure to have cured such default shall not be deemed a Borrower Event of Default (provided that no Advance will be required to be made
during such cure period); 
  
 (c) Attachment. If any
material portion of Borrower’s assets is attached, seized, subjected to a writ or distress warrant, or is levied upon, or comes into the possession of any trustee, receiver or person acting in a similar capacity and such attachment, seizure,
writ or distress warrant or levy has not been removed, discharged or rescinded within 30 days, or if Borrower is enjoined, restrained, or in any way prevented by court order from continuing to conduct all or any material part of its business
affairs, or if a judgment or other claim becomes a lien or encumbrance upon any material portion of Borrower’s assets, or if a notice of lien, levy, or assessment is filed of record with respect to any of Borrower’s assets by the United
States government, or any department, agency, or instrumentality thereof, or by any state, county, municipal, or governmental agency, and the same is not paid within 30 days after Borrower 
  

 17 

 receives notice thereof; provided that none of the foregoing shall constitute a Borrower Event of Default where
such action or event is stayed or an adequate bond has been posted pending a good faith contest by Borrower (provided that no Advance will be required to be made during such cure period); 
  
 (d) Insolvency. If an Insolvency Proceeding is commenced by Borrower, or if an Insolvency Proceeding is commenced
against Borrower and is not dismissed or stayed within 30 days (provided that no Advance will be made prior to the dismissal of such Insolvency Proceeding); 
  
 (e) Judgments. If a judgment or judgments for the payment of money in an amount, individually or in the aggregate, of at least $50,000 shall be
rendered against Borrower and shall remain unsatisfied and unstayed for a period of 30 days (provided that no Advance will be made prior to the satisfaction or stay of such judgment); or 
  
 (f) Misrepresentations. If any material misrepresentation, misstatement or omission exists now or hereafter in any
warranty or representation set forth herein or in any certificate delivered to Lender by any Responsible Officer pursuant to this Agreement or to induce Lender to enter into this Agreement or any other Loan Document. 
  
 10. LENDER’S RIGHTS AND REMEDIES 
  
 (a) Rights and Remedies. Upon the occurrence and during the
continuance of a Borrower Event of Default, Lender may, at its election, without notice of its election and without demand, do any one or more of the following, all of which are authorized by Borrower: 
  
 (i) Declare all Obligations, whether evidenced by this
Agreement, by any of the other Loan Documents, or otherwise, immediately due and payable (provided that upon the occurrence of a Borrower Event of Default described in Section 8.4 all Obligations shall become immediately due and payable without any
action by Lender); 
  
 (ii) Cease advancing money
or extending credit to or for the benefit of Borrower under this Agreement or under any other agreement between Borrower or Lender; 
  
 (iii) Without notice to or demand upon Borrower, make such payments and do such acts as Lender considers necessary or reasonable to
protect its security interest in the Collateral. Borrower agrees to assemble the Collateral if Lender so requires, and to make the Collateral available to Lender as Lender may designate. Borrower authorizes Lender to enter the premises where the
Collateral is located, to take and maintain possession of the Collateral, or any part of it, and to pay, purchase, contest, or compromise any encumbrance, charge, or lien that in Lender’s determination appears to be prior or superior to its
security interest and to pay expenses incurred in connection therewith. With respect to any of Borrower’s owned premises, Borrower hereby grants Lender a license to enter into possession of such premises and to occupy the same, without charge
in order to exercise any of Lender’s rights or remedies provided herein, at law, in equity, or otherwise; 
  

 18 

 (iv) Ship, reclaim, recover, store, finish, maintain, repair, prepare for sale, advertise
for sale, and sell (in the manner provided for herein) the Collateral. Lender is hereby granted a license or other right, solely pursuant to the provisions of this Section 9.1, to use, without charge, Borrower’s labels, Patents, copyrights,
rights of use of any name, trade secrets, trade names, trademarks, service marks, and advertising matter, or any property of a similar nature, as it pertains to the Collateral, in completing production of, advertising for sale, and selling any
Collateral and, in connection with Lender’s exercise of its rights under this Section 9.1, Borrower’s rights under all licenses and all franchise agreements shall inure to Lender’s benefit; 
  
 (v) Sell the Collateral at either a public or private sale,
or both, by way of one or more contracts or transactions, for cash or on terms, in such manner and at such places (including Borrower’s premises) as Lender determines is commercially reasonable, and apply any proceeds to the Obligations in
whatever manner or order Lender deems appropriate; 
  
 (vi) Lender may credit bid and purchase at any public sale; and 
  
 (vii) Any deficiency that exists after disposition of the Collateral as provided will be paid immediately by Borrower. 
  
 (b) Power of Attorney. Effective only upon the occurrence and during the continuance of an Borrower Event of Default, Borrower hereby irrevocably
appoints Lender (and any of Lender’s designated officers or employees) as Borrower’s true and lawful attorney to: (i) send requests for verification of Accounts or notify account debtors of Lender’s security interest in the Accounts;
(ii) endorse Borrower’s name on any checks or other forms of payment or security that may come into Lender’s possession; (iii) sign Borrower’s name on any invoice or bill of lading relating to any Account, drafts against account
debtors, schedules and assignments of Accounts, verifications of Accounts, and notices to account debtors; (iv) make, settle, and adjust all claims under and decisions with respect to Borrower’s policies of insurance; (v) file, in its sole
discretion, one or more financing or continuation statements and amendments thereto, relative to any of the Collateral without the signature of Borrower where permitted by law; (vi) transfer any Collateral into the name of Lender or a third party to
the extent permitted under the UCC; provided that Lender may exercise such power of attorney to sign the name of Borrower on any of the documents described in Section 4.2 regardless of whether a Borrower Event of Default has occurred; and
(vii) settle and adjust disputes and claims respecting the accounts directly with account debtors, for amounts and upon terms that Lender determines to be reasonable; provided that Lender may exercise such power of attorney to sign the name
of Borrower on any of the documents described in Section 4.2 regardless of whether a Borrower Event of Default has occurred. The appointment of Lender as Borrower’s attorney in fact, and each and every one of Lender’s rights and powers,
being coupled with an interest, is irrevocable until all of the Obligations have been fully repaid and performed and Lender’s obligation to provide Advances hereunder is terminated. 
  
 (c) Accounts Collection. At any time from the date of this Agreement, Lender may notify any Person owing funds to
Borrower of Lender’s security interest in such funds and verify the amount of such Account. After the occurrence and during the continuance of 
  

 19 

 a Borrower Event of Default, Borrower shall collect all amounts owing to Borrower for Lender, receive in trust all
payments as Lender’s trustee, and immediately deliver such payments to Lender in their original form as received from the account debtor, with proper endorsements for deposit. 
  
 (d) License. Lender shall have a nonexclusive, royalty-free license to use the Intellectual Property to the extent
reasonably necessary to permit Lender to exercise its rights and remedies upon the occurrence of a Borrower Event of Default. 
  
 (e) Lender’s Liability for Collateral. So long as Lender complies with Section 9.207 of the UCC, Lender shall not in any way or manner be
liable or responsible for: (i) the safekeeping of the Collateral; (ii) any loss or damage thereto occurring or arising in any manner or fashion from any cause; (iii) any diminution in the value thereof; or (iv) any act or default of any carrier,
warehouseman, bailee, forwarding agency, or other Person whomsoever. All risk of loss, damage or destruction of the Collateral shall be borne by Borrower. 
  
 (f) Remedies Cumulative. Lender’s rights and remedies under this Agreement, the other Loan Documents, and all other agreements shall be
cumulative. Lender shall have all other rights and remedies not inconsistent herewith as provided under the UCC, by law, or in equity. No exercise by Lender of one right or remedy shall not be deemed an election to waive any other right or remedy,
and no waiver by Lender of any Borrower Event of Default shall be deemed a continuing waiver. No delay by Lender shall constitute a waiver, election, or acquiescence by it. No waiver by Lender shall be effective unless made in a written document
signed on behalf of Lender and then shall be effective only in the specific instance and for the specific purpose for which it was given. 
  
 (g) Demand; Protest. Borrower waives demand, protest, notice of protest, notice of default or dishonor, notice of payment and nonpayment, notice of
any default, nonpayment at maturity, release, compromise, settlement, extension, or renewal of accounts, documents, instruments, chattel paper, and guarantees at any time held by Lender on which Borrower may in any way be liable. 
  
 11. NOTICES 
  
 Unless otherwise provided in this Agreement, all notices or demands by any
party relating to this Agreement or any other agreement entered into in connection herewith shall be in writing and (except for financial statements and other informational documents that may be sent by first-class mail, postage prepaid) shall be
personally delivered or sent by a recognized overnight delivery service, certified mail, postage prepaid, return receipt requested, or by telefacsimile to Borrower or to Lender, as the case may be, at its address set forth below: 
  

			
	If to Borrower:	    	NexQL Corporation
	 	    	12250 Inwood Road #6
	 	    	Dallas, Texas 75244
	 	    	Attn: President
	 	    	FAX: (214) 387-0515

  

 20 

			
	If to Lender:	    	Crossroads Systems, Inc.
	 	    	8900 North Mopac Expressway
	 	    	Austin, Texas 78759
	 	    	Attn: Chief Financial Officer
	 	    	FAX: (512) 349-0304

  
 The parties may change
the address at which they are to receive notices hereunder, by notice in writing in the foregoing manner given to the other. 
  
 12. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER 
  
 This Agreement shall be governed by, and construed in accordance with, the internal laws of the State of Texas, without regard to principles of conflicts
of laws. Each of Borrower and Lender hereby submits to the exclusive jurisdiction of the state and federal courts located in Travis County, Texas. BORROWER AND LENDER EACH HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS. EACH PARTY RECOGNIZES AND
AGREES THAT THE FOREGOING WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR IT TO ENTER INTO THIS AGREEMENT. EACH PARTY REPRESENTS AND WARRANTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY
TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. 
  
 13.
GENERAL PROVISIONS 
  
 (a) Successors and Assigns.
This Agreement shall bind and inure to the benefit of the respective successors and permitted assigns of each of the parties; provided, however, that neither this Agreement nor any rights hereunder may be assigned by Borrower without
Lender’s prior written consent, which consent may be granted or withheld in Lender’s sole discretion. Except in connection with a sale of Lender (through a merger, consolidation, sale of all of its assets or stock, or similar transaction),
Lender shall not have the right without the consent of Borrower to sell, transfer, negotiate, or grant participation in all or any part of, or any interest in, Lender’s obligations, rights and benefits hereunder. 
  
 (b) Indemnification. Borrower shall defend, indemnify and hold
harmless Lender and its officers, employees, and agents against: (i) all obligations, demands, claims, and liabilities claimed or asserted by any other party in connection with the transactions contemplated by this Agreement; and (ii) all losses or
Lender Expenses in any way suffered, incurred, or paid by Lender as a result of or in any way arising out of, following, or consequential to transactions between Lender and Borrower whether under this Agreement, or otherwise (including without
limitation reasonable attorney’s fees and expenses), except for losses caused by Lender’s gross negligence or willful misconduct. 
  

 21 

 (c) Time of the Essence. Time is of the essence for the performance of all obligations set forth
in this Agreement. 
  
 (d) Severability of Provisions. Each
provision of this Agreement shall be severable from every other provision of this Agreement for the purpose of determining the legal enforceability of any specific provision. 
  
 (e) Amendments in Writing; Integration. This Agreement cannot be amended or terminated orally. All prior agreements,
understandings, representations, warranties, and negotiations between the parties hereto with respect to the subject matter of this Agreement, if any, are merged into this Agreement and the other Loan Documents. 
  
 (f) Counterparts. This Agreement may be executed in any number of
counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one and the same Agreement. Signatures
transmitted via facsimile shall be deemed originals for purposes of this Agreement. 
  
 (g) Survival. All covenants, representations and warranties made in this Agreement shall continue in full force and effect so long as any Obligations remain outstanding. The obligations of Borrower to indemnify
Lender with respect to the expenses, damages, losses, costs and liabilities described in Section 12.2 shall survive until all applicable statute of limitations periods with respect to actions that may be brought against Lender have run. 

 
 (h) Usury. All agreements between Borrower and Lender, whether now
existing or hereafter arising and whether written or oral, are expressly limited so that in no contingency or event whatsoever, whether by acceleration of the maturity of the Note or otherwise, shall the amount paid, or agreed to be paid, to Lender
for the use, forbearance or detention of the money to be loaned hereunder or otherwise, exceed the maximum amount permissible under applicable law. If from any circumstances whatsoever fulfillment of any provision of this Agreement or the other Loan
Documents or of any other document evidencing, securing or pertaining to the indebtedness evidenced hereby, at the time performance of such provision shall be due, shall involve transcending the limit of validity prescribed by law, then ipso
facto, the obligation to be fulfilled shall be reduced to the limit of such validity, and if from any such circumstances Lender shall ever receive anything of value as interest or deemed interest by applicable law under this Agreement, any other
Loan Document or any other document evidencing, securing or pertaining to the indebtedness evidenced hereby or otherwise an amount that would exceed the highest lawful rate, such amount that would be excessive interest shall be applied to the
reduction of the principal amount owing under the Note or on account of any other indebtedness of Borrower to Lender relating to this Agreement, and not to the payment of interest, or if such excessive interest exceeds the unpaid balance of
principal of the Note and such other indebtedness, such excess shall be refunded to Borrower. In determining whether or not the interest paid or payable with respect to any indebtedness of Borrower to Lender, under any specific contingency, exceeds
the highest lawful rate, Borrower and Lender shall, to the maximum extent permitted by applicable law, (i) characterize any non-principal payment as an expense, fee or premium rather than as interest, (ii) amortize, prorate, allocate and spread the
total amount of interest throughout the full term of such indebtedness so that the actual rate of interest 
  

 22 

 on account of such indebtedness is uniform throughout the term thereof and/or (iii) allocate interest between portions of
such indebtedness, to the end that no such portion shall bear interest at a rate greater than that permitted by law. The terms and provisions of this section shall control and supersede every other conflicting provision of all agreements between
Borrower and Lender. 
  
 (i) Termination of Prior
Agreement. Borrower and Lender agree that the Prior Agreement is hereby amended and restated and shall be of no further force or effect. 
  
 (j) Joint Product. This Agreement and the other Loan Documents are the joint product of Borrower and Lender and each provision hereof and thereof
has been subject to the mutual consultation, negotiation and agreement of Borrower and Lender and shall not be construed against either party. 
  
 [SIGNATURE PAGE TO LOAN AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT FOLLOWS] 
  

 23 

 IN WITNESS WHEREOF, the parties hereto have caused this Amended and Restated Loan and Security Agreement
to be executed as of the date first written above. 
  

			
	BORROWER:
	
	NEXQL CORPORATION
		
	By:	 	 /s/ Elliott Brackett

	Name:	 	Elliott Brackett
	Title:	 	President
	
	LENDER:
	
	CROSSROADS SYSTEMS, INC.
		
	By:	 	 /s/ Robert C. Sims

	Name:	 	Robert C. Sims
	Title:	 	President and CEO

 SCHEDULE I 
  

Disclosure Schedule 
  
 Section 4(f)(iii) — Stock Ownership 
  

			
	 Holder

	  	 Shares of Common Stock

	NexQL Holdings LLC	  	6,000,000
		
	Crossroads Systems, Inc.	  	2,000,000 (prior to issuance of 3,002,643 shares pursuant to conversion)
		
	David Cerf	  	40,000 (subject to issuance of certificate)

 SCHEDULE II 
  
 Intellectual Property 
  
 COPYRIGHTS 
  

					
	 Description

	  	 Registration Date

	  	 Registration No.

	None	  	 	  	 

  
 PATENTS

  

							
	 Patent No.

	  	 Issue Date

	  	 Invention

	  	 Inventor

	6,507,877	  	1/14/2003	  	Asynchronous concurrent dual-stream FIFO	  	Ross
				
	6,535,150	  	3/18/2003	  	Method and apparatus for implementing run-length compression	  	Ross
				
	6,334,123	  	12/25/2001	  	Index relational processor	  	Ross
				
	(EP) 959738.6	  	 	  	Index relational processor	  	Ross

  
 PATENT APPLICATIONS

  

									
	 Applicant’s
 Name

	  	 Date
 Filed

	  	 Application
 Number

	  	 Invention

	  	Inventor

	Cox	  	6/18/2004	  	10/871858	  	Integrated Database Indexing System	  	Cox
					
	Ross	  	9/3/1999	  	09/389,567	  	Universal Configurable Serial Bit Stream Processor	  	Ross
					
	Ross	  	10/6/2000	  	09/684,761	  	Enhanced Boolean Processor with Parallel Input	  	Ross

  
 TRADEMARKS

  

					
	 Mark

	 	 Registration Date

	 	 Registration No.

	None	 	 	 	 

  
 TRADEMARK
APPLICATIONS 
  

					
	 Mark

	 	 Application Date

	 	 Application No.

	NEXQL	 	12/29/2003	 	78/345954

 LICENSES HELD BY BORROWER 
  
 None. 
  
 LICENSES GRANTED BY BORROWER 
  
 Marketing Agreement by and between Borrower and Exclusive Markets dated July 13, 2004. 
  

 2 

 SCHEDULE III 
  
 Collateral 
  
 The Collateral shall consist of all right, title and interest of Borrower in and to the following: 
  
 (i) All goods and equipment now owned or hereafter acquired, including,
without limitation, all machinery, fixtures, vehicles (including motor vehicles and trailers), and any interest in any of the foregoing, and all attachments, accessories, accessions, replacements, substitutions, additions, and improvements to any of
the foregoing, wherever located; 
  
 (ii) All inventory, now
owned or hereafter acquired, including, without limitation, all merchandise, raw materials, parts, supplies, packing and shipping materials, work in process and finished products including such inventory as is temporarily out of Borrower’s
custody or possession or in transit and including any returns upon any accounts or other proceeds, including insurance proceeds, resulting from the sale or disposition of any of the foregoing and any documents of title representing any of the above,
and Borrower’s Books relating to any of the foregoing; 
  
 (iii) All contract rights and general intangibles now owned or hereafter acquired, including, without limitation, goodwill, Trademarks, trade styles, Patents, Copyrights, leases, license agreements, franchise agreements, blueprints,
drawings, purchase orders, customer lists, route lists, infringements, claims, computer programs, computer discs, computer tapes, literature, reports, catalogs, design rights, income tax refunds, payments of insurance and rights to payment of any
kind; 
  
 (iv) All now existing and hereafter arising accounts,
contract rights, royalties, license rights and all other forms of obligations owing to Borrower arising out of the sale or lease of goods, the licensing of technology or the rendering of services by Borrower, whether or not earned by performance,
and any and all credit insurance, guaranties, and other security therefor, as well as all merchandise returned to or reclaimed by Borrower and Borrower’s Books relating to any of the foregoing; 
  
 (v) All documents, cash, deposit accounts, securities, financial assets,
investment properties, securities accounts, securities entitlements, letters of credit, certificates of deposit, instruments and chattel paper now owned or hereafter acquired and Borrower’s Books relating to the foregoing; 
  
 (vi) All copyright rights, copyright applications, copyright registrations
and like protections in each work of authorship and derivative work thereof, whether published or unpublished, now owned or hereafter acquired; all trade secret rights, including all rights to unpatented inventions, know-how, operating manuals,
license rights and agreements and confidential information, now owned or hereafter acquired; all mask work or similar rights available for the protection of semiconductor chips, now owned or hereafter acquired; all claims for damages by way of any
past, present and future infringement of any of the foregoing; and 
  

 III-1 

 (vii) Any and all claims, rights and interests in any of the above and all substitutions for, additions
and accessions to and proceeds thereof. 
  
 Notwithstanding the
foregoing, the term “Collateral” shall not include any general intangibles or contracts of Borrower (whether owned or held as licensee or lessee, or otherwise) to the extent that (i) such general intangibles or contracts are not assignable
or capable of being encumbered as a matter of law or under the terms of the license, lease or other agreement applicable thereto (but solely to the extent that such restriction shall be enforceable under applicable law) without the consent of the
licensor or lessor thereof or other applicable parry thereto and (ii) such consent has not been obtained: provided, however that the foregoing grant of security interest shall extend to, and the term “Collateral” shall include, (A) any
general intangible or contract which is an Account or a proceed of, or otherwise related to the enforcement or collection of, any Account or goods which are the subject of any Account, and (B) any and all proceeds of any general intangibles or
contracts which are otherwise excluded to the extent that the assignment or encumbrance of such proceeds is not so restricted, and (C) upon obtaining the consent of any such licensor, lessor or other applicable party with respect to any such
otherwise excluded general intangibles or contracts, such general intangibles or contracts as well as any and all proceeds thereof that might theretofore have been excluded from such grant of a security interest and the term
“Collateral.” 
  

 III-2 

 SCHEDULE IV 
  
 Permitted Indebtedness 
  
 None. 

 EXHIBIT A 
  

AGREEMENT 
  
 THIS AGREEMENT dated as of March 22, 2005 (this “Agreement”) is made by and among NexQL Corporation, a Delaware corporation
(the “Company”), Crossroads Systems, Inc., a Delaware corporation (the “Investor”), and NexQL Holdings, LLC, a Texas limited liability company (the “Stockholder”). Capitalized
terms not defined herein shall have the meanings ascribed to such terms in that certain Acquisition Option Agreement dated as of December 16, 2003 (the “Option Agreement”). 
  
 RECITALS 
  
 WHEREAS, the Company, the Investor, the Stockholder and the holders of
membership interests in the Stockholder are parties to the Option Agreement that provides for, among other things, the acquisition of the Company by the Investor; 
  
 WHEREAS, the Company and the Investor are entering into an Amended and Restated Loan and Security Agreement
concurrently with the execution and delivery of this Agreement, whereby Investor would agree to provide additional financing to the Company, and, in connection with such transaction, desire to terminate the Option Agreement, amend certain other
agreements to which the Company and the Investor are parties and provide for certain other rights as set forth herein; 
  
 WHEREAS, pursuant to Section 9.3 thereof, the Option Agreement may be terminated by the execution and delivery of a written agreement executed by
the Company, the Investor and the Stockholder (unless the Stockholder has distributed the Common Stock of the Company held by the Stockholder to the holders of its membership interests); 
  
 WHEREAS, the Stockholder has not distributed the Common Stock of the Company held by the Stockholder; and 

 
 WHEREAS, the parties hereto desire to enter into this Agreement to
provide for the termination of the Option Agreement and each Proxy entered into pursuant to the Option Agreement, and the amendment of certain other agreements. 
  

AGREEMENT 
  
 NOW, THEREFORE, in consideration of the foregoing recitals and certain other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows: 
  
 1. Termination of Option Agreement. Subject to the execution and delivery of the Amendments pursuant to Section 2 below, the Option Agreement and each Proxy delivered in favor of Investor pursuant thereto is hereby terminated
pursuant to Section 9.3 of the Option Agreement and shall be of no further force and effect whatsoever; and each of the parties thereto is hereby deemed to have released any rights or claims of any kind (matured, contingent or otherwise) against
each other party thereto arising out of the existence or operation of the 

  

 A-1 

 
Option Agreement or the actions of the Company or the Investor under or in relation to such Option Agreement (but not any other agreement) during the period
that the Option Agreement was in effect. 
  
 2. Amendments to
Other Agreements. Concurrently with the effectiveness of the termination of the Option Agreement pursuant to Section 1 above, and as a material inducement for the other agreements contained herein, the applicable parties hereto are entering into
amendments (the “Amendments”) to the Voting Agreement, Investor’s Rights Agreement and Right of First Refusal and Co-Sale Agreement, each dated as of December 16, 2003, the forms of which amendments are attached as
Exhibits A, B and C, respectively. 
  
 3.
Acquisition Right of First Refusal. 
  
 (a) Notice.
In the event that (A) the Company contemplates any liquidation, dissolution or winding up, either voluntary or involuntary or (B) has received a bona fide third party offer with respect to (i) the acquisition of the Company by another entity by
means of any transaction or series of related transactions (including, without limitation, any reorganization, merger or consolidation) unless the Company’s stockholders of record as constituted immediately prior to such acquisition will,
immediately after such acquisition (by virtue of securities issued as consideration for the Company’s acquisition or otherwise) hold at least 50% of the voting power of the surviving or acquiring entity (except that the sale by the Company of
shares of its capital stock to investors in bona fide common stock or preferred stock financing transactions shall not be deemed an acquisition for this purpose); (ii) the sale of a material portion of the assets of the Company, including the sale
of a material portion of the assets of the Company’s subsidiaries, if such assets constitute a material portion of the assets of the Company and such subsidiaries taken as a whole; or (iii) the grant of an exclusive license of a material
portion or all or substantially all of the Company’s intellectual property (each, a “Liquidation Transaction”), the Company shall give to the Investor a notice (a “Notice”) within one business
day. Such Notice shall include a copy of any third party offer with respect to a Liquidation Transaction or if such offer is not is writing, then a summary of the material terms and conditions of the proposed Liquidation Transaction and the identity
of the party making such proposal. 
  
 (b) Negotiation
Period. The Investor shall have a period of 30 days following its receipt of the Notice (the “Negotiation Period”) in which to present to the Company a counter-offer or alternative proposal (an “Investor
Offer”). During such 30 day period, the Investor, at its sole option, shall have the opportunity in such Investor Offer either to match such Liquidation Transaction proposal or to provide for consideration by the Company’s Board of
Directors its own acquisition offer. In any event, during such 30 day period the Investor shall have the exclusive right to engage in negotiations with the Company with respect to such Investor Offer. During the Negotiation Period (the last date of
which being the “Expiration Date”), the Company will not enter into an agreement, or otherwise accept an offer, with respect to, or effect, a Liquidation Transaction. If the Investor determines during the Negotiation Period
it then has no interest in acquiring the Company or its technology, it will so notify the Company (a “Decline Notice”). If the Investor does not deliver an Investor Offer within the Negotiation Period, or if the Investor has
issued a Decline Notice, then the Company shall be free, subject in any event to the other provisions of this Section 3, for a period of 90 days 

  

 A-2 

 
following the expiration of the Negotiation Period, to agree to accept or effect the Liquidation Transaction proposal on the terms and conditions set forth
in the Notice or on such other terms and conditions, in the aggregate, no more favorable to the potential acquiror than those specified in the Notice (such consummation or entry into a binding agreement, a “Binding Liquidation
Transaction”). In the event of a Binding Liquidation Transaction during this 90-day period, the Investor will have no other rights under this section unless such Binding Liquidation Transaction is ultimately abandoned without being
consummated. In the event that no Binding Liquidation Transaction is consummated during such 90-day period, then the provisions of this section shall again apply. Any proposed acquisition of the Company or sale or liquidation of its assets pursuant
to an Liquidation Transaction proposal after the end of such 90-day period or any change in the terms of such Liquidation Transaction proposal which are more favorable to the potential acquiror shall require a new Notice, and shall give rise anew to
the rights of the Investor provided in this Section 3. If the terms of any Liquidation Transaction proposal include stock or other securities (“Stock”), the Investor shall be deemed to have matched the terms of such
Liquidation Transaction proposal if it agrees to substitute for such Stock component of the Liquidation Transaction proposal either cash or Investor Stock having a “fair market value” equivalent to the fair market value of the Stock
component of the subject Liquidation Transaction proposal. “Fair market value” shall mean, with respect to the Stock of any potential acquiror or with regard to Investor Stock: (i) which is traded on a nationally recognized
exchange, the average of the three (3) days’ closing price of such Stock on the date immediately prior to the Investor Offer; (ii) which is actively traded over-the-counter, the average of the three (3) days closing bid or sale price (whichever
is applicable) of such Stock immediately prior to the Investor Offer; and (iii) if such Stock is not publicly traded, the value assigned to such Stock on the date immediately prior to the Investor Offer by a nationally recognized investment advisor
designated by the mutual agreement of the Company and the Investor. The fair market value of any other non-cash consideration shall be determined in the same manner as for such non-publicly traded stock. 
  
 (c) Void Transactions. Unless the Company shall have complied fully
with all of the procedures and requirements of this Section 3, then any Liquidation Transaction proposal which the Company may accept, and any transaction it may purport to effect pursuant thereto, shall be void ab initio. 
  
 (d) Applicability and Termination. This Section 3 shall apply until
the earliest to occur of (i) the consummation of a Binding Liquidation Transaction following compliance with the foregoing provisions, (ii) the consummation by the Company of a firm commitment underwritten initial public offering of shares of its
common stock, or (iii) at such time after the Company becomes subject to the periodic reporting requirements of Sections 13 or 15(d) of the Securities Exchange Act of 1934 that the Investor does not beneficially own at least 10% of the
Company’s common stock. 
  
 4. Miscellaneous.

  
 (a) Amendment and Waiver. Any term or provision of this
Agreement may be amended only by the written consent of the Company and the Investor. The observance of any term of this Agreement may be waived (either generally or in a particular instance and 

  

 A-3 

 
either retroactively or prospectively) only by a writing signed by the party to be bound by such waiver. 
  
 (b) Governing Law. The construction, validity and interpretation of
this Agreement will be governed by the internal laws of the State of Delaware without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of Delaware. 
  
 (c) Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 
  
 (d) Effect of Agreement. Except as expressly set forth in this
Agreement, the Amendments, or that certain Amended and Restated Loan and Security Agreement to be entered into concurrently herewith, each other agreement between or among any of the parties hereto shall continue in full force and effect. The
agreements set forth in Sections 1 and 2 shall be deemed to be effective concurrently and shall be cross-conditioned on each other. 
  
 (e) Interpretation of Drafting. This Agreement and the Amendments are the joint product of the Company, the Investor and the Stockholder and each
provision hereof and thereof has been subject to the mutual consultation, negotiation and agreement of the Company, the Investor and the Stockholder and shall not be construed against any party. In the event an ambiguity or question of intent or
interpretation arises, this Agreement and each Amendment shall be construed as if drafted jointly by the parties and no presumption or burden or proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions
of this Agreement or any Amendment, nor shall comparisons to prior unexecuted drafts of this Agreement or any Amendment be admissible as evidence of intent or interpretation. 
  
 (f) Expenses. Each party hereto will bear its own expenses in connection with the negotiation and preparation of this
Agreement and the Amendments. 
  
 (g) Entire Agreement.
This Agreement, together with the Amendments, constitutes the full and entire understanding and agreement among the parties hereto with regard to the subject matter hereof. 
  
 [Signature Page Follows] 
  

 A-4 

 IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first set forth
above. 
  

			
	 COMPANY:
  
 NEXQL CORPORATION

		
	By:	 	 
	Name:	 	 
	Title:	 	 
	
	 INVESTOR:
  
 CROSSROADS SYSTEMS, INC.

		
	By:	 	 
	Name:	 	 
	Title:	 	 
	
	 STOCKHOLDER:
  
 NEXQL HOLDINGS, LLC

		
	By:	 	 
	Name:	 	 
	Title:	 	 

  
 [SIGNATURE PAGE TO TERMINATION AGREEMENT] 
  

 A-5 

 EXHIBIT A 
  
 Amendment No. 1 to Voting Agreement 
  

 

 A-6 

 AMENDMENT No. 1 TO VOTING AGREEMENT 
  
 THIS AMENDMENT No. 1 TO VOTING AGREEMENT dated as of March 22, 2005 (this “Amendment”) is
made by and among NexQL Corporation, a Delaware corporation (the “Company”), the Common Stockholder and the Investor. Capitalized terms used but not defined herein shall have the respective meanings assigned to them in that
certain Voting Agreement dated as of December 16, 2003 (the “Agreement”) by and among the Company, the Common Stockholder and the Investor. 
  
 RECITALS 
  
 WHEREAS, William P. Wood, an Investor Director, tendered his resignation as a director of the Company effective as of October 25, 2004, and the
Investor has not designated a replacement to fill the resulting vacancy at this time;  
  
 WHEREAS, the Company, the Common Stockholder and the Investor are parties to that certain Acquisition Option Agreement dated as of December 16, 2003 (the “Option Agreement”) providing
for, among other things, the acquisition of the Company by the Investor upon the satisfaction of certain conditions precedent, and the Company and the Investor are parties to a Loan and Security Agreement dated as of December 16, 2003 providing for,
among other things, the financing of the Company by the Investor; 
  
 WHEREAS, the Company and the Investor are entering into an Amended and Restated Loan and Security Agreement concurrently with the execution and delivery of this Agreement, whereby Investor would agree to provide additional financing
to the Company, and, in connection with such transaction, are terminating the Option Agreement, amending certain other agreements to which the Company and the Investor are parties, and providing for certain other rights in favor of the Investor;

  
 WHEREAS, in connection with the aforementioned
transactions, the Company, the Common Stockholder and the Investor desire to amend the Agreement as provided herein; and 
  
 WHEREAS, pursuant to Section 3.3 thereof, any term of the Agreement may be amended with the written consent of the Company, the Investor and the
holders of a majority of the Common Stock then outstanding and held by the Stockholders. 
  
 AGREEMENT 
  
 NOW, THEREFORE, in consideration of the foregoing recitals and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 
  

	5.	Amendment to Section 2.2(a). Section 2.2(a) of the Agreement is hereby amended and restated in its entirety to be and read as follows: 

  
 (a) Number. From and after the date of this Agreement, each of the
Stockholders shall vote all Stockholder Shares of the 

  

 A-7 

 
Company over which such Stockholder has voting control, and shall take all other necessary or desirable actions within his, her, or its control (whether in
his, her, or its capacity as a stockholder, director, or officer of the Company or otherwise), including, without limitation, calling meetings, attending meetings, executing a proxy to vote at any meeting and executing written consents, in order to
ensure that the size of the Board of Directors (the “Board”) shall be set at no more than five (5) and to cause the election to the Board of: 
  
 (i) Investor Directors. Two representatives designated by the Investor (the “Investor
Directors”), one of whom shall initially be Rob Sims with the other seat initially being vacant until a designee is named by the Investor; 
  
 (ii) Common Stockholder Directors. Two representatives designated by the Common Stockholders as a separate class (the
“Common Stockholder Directors”), one of whom shall be the Company’s Chief Executive Officer (or if no person is elected to the title of Chief Executive Officer, then the President), initially Elliott Brackett, and the
other of whom initially shall be Bob Hamman; and 
  
 (iii) Independent Director. One representative designated after the date hereof by (i) unanimous consent of the Common Stockholder Directors and the Investor Directors or (ii) by mutual agreement of the Common Stockholder and the
Investor, who shall be an independent, outside director with industry experience (the “Independent Director”). 
  

	6.	Amendment to Section 2.2(f). Section 2.2(f) of the Agreement is hereby amended and restated in its entirety to be and read as follows: 

  
 (f) Meetings; Quorum. The Company agrees to hold meetings of the
Board, the timing and frequency of which shall be determined by the Board (including the Investor Directors) but shall be no less frequent than quarterly. The Company shall provide each Director with written notice at least three days (24 hours, in
the case of a telephone meeting) in advance of all meetings of the Board and all meetings of committees of the Board. A quorum for purposes of conducting business shall not be deemed to be present at any meeting of the Board or any committee thereof
unless at least one Investor Director and one Common Stockholder Director are present at such meeting; provided that this requirement may be waived, either proactively or retroactively, in writing signed by either the Investor in the case of an
Investor Director or the holders of a majority of the shares of 

  

 A-8 

 
Common Stock held by all Common Stockholders in the case of a Common Stockholder Director, as applicable, or each of the Investor Directors or Common
Stockholder Directors, as applicable, then in office (provided further that such waiver shall only be effective if a quorum was otherwise present). If any Investor Director or Common Stockholder Director is not able to attend a Board meeting or a
meeting of a committee on which he serves, or if either an Investor Director or Common Stockholder Director seat is vacant for any reason, the Investor or the holders of a majority of shares of Common Stock held by all Common Stockholders, as
applicable, may, subject to the consent of the Company, which consent shall not be unreasonably withheld, designate any one person to attend as an observer. Notwithstanding the foregoing, the Company (i) may condition the right of any such observer
to attend meetings of the Board and receive information with respect to and during such meetings on the execution of a confidentiality agreement in substance comparable to the protections afforded the Company under Section 4.8 of that certain
Investor’s Rights Agreement of even date herewith between the Company and the Investor, and (ii) may prevent such person from attending a Board meeting (or portion thereof) or receiving certain information with respect thereto if the Company
believes, after consultation with its counsel, that it is necessary to do so to ensure preservation of the attorney-client privilege. 
  

	7.	Amendment to Section 3.2. Section 3.2 of the Agreement is hereby amended and restated in its entirety to be and read as follows: 

  
 3.2 Termination. This Agreement shall terminate and be of no further
force or effect upon the earliest to occur of (1) the closing of the sale of the Company’s Common Stock in a firm commitment, underwritten public offering registered under the Securities Act of 1933 as amended, other than a registration
relating solely to a transaction under Rule 145 under the Securities Act (or any successor thereto) or to an employee benefit plan of the Company, at a public offering price (prior to underwriters’ discounts and expenses) equal to or exceeding
$2.50 per share of Common Stock (as adjusted for any stock dividends, combinations or splits with respect to such shares) and with aggregate proceeds to the Company (after deduction for underwriters’ discounts and expenses relating to the
issuance, including without limitation fees of the Company’s counsel) which exceed $20,000,000; (ii) the written agreement of the Company and the Investor; (iii) the acquisition by a single purchaser of all of the issued and outstanding shares
of Common Stock; (iv) the sale of the Company (through a merger, consolidation, sale of all or substantially all of 

  

 A-9 

 
its assets or stock, or similar transaction); or (v) the occurrence of a Lender Event of Default as defined in that certain Loan and Security Agreement dated
as of December 16, 2003, as amended, by and between the Company and the Investor. 
  

	8.	Amendment to Section 3.3. Section 3.2 of the Agreement is hereby amended and restated in its entirety to be and read as follows: 

  
 3.3 Amendment; Waiver. This Agreement may be amended and the
observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of (i) the Company, (ii) the Investor and (iii) the holders of at least a
majority of the shares of Common Stock then held by the Common Stockholders; provided, however, that in the event NexQL Holdings, LLC distributes the Company’s Common Stock to any of the persons listed on Exhibit C of the Purchase
Agreement, then as of the effective date of such distribution, such persons shall execute the counterpart signature page attached to this Agreement and each such person shall become a “Common Stockholder” hereunder without any need to
obtain the written agreement of the other parties pursuant to this Section 3.3. 
  

	9.	Effectiveness of Amendment. This Amendment shall be effective upon execution by the Company, the Investor and the holders of a majority of the Common Stock currently
outstanding and held by the Stockholders. 

  

	10.	Effect of Amendment. Except as amended as set forth above, the Agreement shall continue in full force and effect. 

  

	11.	Counterparts. This Amendment may be signed in one or more counterparts, each of which shall be deemed an original and all of which, taken together, shall be deemed one and
the same document. 

  

	12.	Interpretation of Drafting. The parties have participated jointly in the negotiation and drafting of this Amendment. In the event an ambiguity or question of intent or
interpretation arises, this Amendment shall be construed as if drafted jointly by the parties and no presumption or burden or proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Amendment,
nor shall comparisons to prior unexecuted drafts of this Amendment be admissible as evidence of intent or interpretation. 

  
 [Signature Page Follows] 
  
  

 A-10 

 IN WITNESS WHEREOF, the undersigned have executed this Amendment No. 1 to Voting Agreement as of
the date first written above. 
  

			
	 THE COMPANY:
  
 NEXQL CORPORATION

		
	By:	 	 
	Name:	 	 
	Title:	 	 
	
	 THE COMMON STOCKHOLDER:
  
 NEXQL HOLDINGS, LLC

		
	By:	 	 
	Name:	 	 
	Title:	 	 
	
	 THE INVESTOR:
  
 CROSSROADS SYSTEMS, INC.

		
	By:	 	 
	Name:	 	 
	Title:	 	 

  

 A-11 

 EXHIBIT B 
  
 Amendment No. 1 to Investor’s Rights Agreement 
  
  

 A-12 

 AMENDMENT No. 1 TO INVESTOR’S RIGHTS AGREEMENT 
  
 THIS AMENDMENT No. 1 TO INVESTOR’S RIGHTS AGREEMENT dated as of
March 22, 2005 (this “Amendment”), is made by and among NexQL Corporation, a Delaware corporation (the “Company”), the Key Stockholder and the Investor. Capitalized terms used but not defined herein
shall have the respective meanings assigned to them in that certain Investor’s Rights Agreement dated as of December 16, 2003 (the “Agreement”) by and among the Company, the Key Stockholder and the Investor. 

 
 RECITALS 
  
 WHEREAS, the Company, the Key Stockholder and the Investor are parties
to that certain Acquisition Option Agreement dated as of December 16, 2003 (the “Option Agreement”) providing for, among other things, the acquisition of the Company by the Investor upon the satisfaction of certain conditions
precedent, and the Company and the Investor are parties to a Loan and Security Agreement dated as of December 16, 2003 providing for, among other things, the financing of the Company by the Investor; 
  
 WHEREAS, the Company and the Investor are entering into an Amended and
Restated Loan and Security Agreement concurrently with the execution and delivery of this Agreement, whereby Investor would agree to provide additional financing to the Company, and, in connection with such transaction, are terminating the Option
Agreement, amending certain other agreements to which the Company and the Investor are parties, and providing for certain other rights in favor of the Investor; 
  

WHEREAS, in connection with the aforementioned transactions, the Company, the Key Stockholder and the Investor desire to amend the Agreement as
provided herein; and 
  
 WHEREAS, pursuant to Section 4.7
thereof, any term of the Agreement may be amended with the written consent of the Company and the holders of at least a majority of the Registrable Securities then outstanding. 
  
 AGREEMENT 
  
 NOW, THEREFORE, in consideration of the foregoing recitals and other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows: 
  

	13.	Amendments to Section 2.1. Section 2.1 of the Agreement is hereby amended by: 

  

	 	(a)	Deleting the introductory language to such section and replacing it in its entirety with the following new introductory language: 

  
 “2.1 Company Restrictions. The Company shall not without first
obtaining the written approval of (i) Investor, for so long as Investor owns at least 50% of the Registrable Securities, and (ii) the holders of a majority of the shares of Common Stock subject to this Agreement held by the Key Stockholders, for so
long as the 

  

 A-13 

 
Key Stockholders continue to own at least 50% of the Common Stock held by the Key Stockholders as of March 22, 2005:”; 
  

	 	(b)	deleting the text of subsections (a), (b) and (p) thereof and replacing the text of each subsection so deleted with the language “[intentionally deleted]”; and

  

	 	(c)	replacing subsection (k) with a new subsection (k) as follows: “(k) change the number of authorized directors of the Board of Directors in a manner inconsistent with the Voting
Agreement;”. 

  

	14.	Amendment to Section 2.3. Section 2.3 of the Agreement is hereby amended and restated in its entirety to be and read as follows: 

  
 2.3 Termination of Protective Provisions. The protective provisions
as set forth in this Section 2 shall expire (i) upon the consummation of the Company’s initial public offering pursuant to a firm commitment underwritten public offering of the Company’s Common Stock registered under the Securities Act of
1933; or (ii) upon the consummation of the sale of all, or substantially all, of the Company’s assets or capital stock either through a direct sale or merger, consolidation, reorganization or any other form of business combination or
acquisition in which the Company is the target of such acquisition (even if the Company is the surviving entity in such transaction) which results in the stockholders of the Company not holding, directly or indirectly, at least 50% of the voting
power of the surviving, continuing or purchasing entity. 
  

	15.	Amendment to Section 3.4. Section 3.4 of the Agreement is hereby amended and restated in its entirety to be and read as follows: 

  
 3.4 Limitations on Subsequent Registration Rights. The Company shall
not, without the prior written consent of the Investor, enter into any agreement with any holder or prospective holder of any securities of the Company giving such holder or prospective holder any registration rights the terms of which are senior or
pari passu to the registration rights granted to the Investor hereunder. 
  

	16.	Amendment to Section 4.7. Section 4.7 of the Agreement is hereby amended and restated in its entirety to be and read as follows: 

  
 4.7 Amendments and Waivers. Except as permitted under this Section
4.7, any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of (i) the
Company, (ii) the holders of at least a majority of the Registrable Securities 

  

 A-14 

 
then outstanding and (iii) the holders of at least a majority of the shares of Common Stock then held by all Key Stockholders; provided,
however, that in the event NexQL Holdings, LLC distributes the Company’s Common Stock to any of the persons listed on Exhibit C of the Purchase Agreement, then as of the effective date of such distribution, such persons shall execute the
counterpart signature page attached to this Agreement and each such person shall become a “Key Stockholder” hereunder without any need to obtain the written agreement of the parties pursuant to this Section 4.7. Any amendment or
waiver effected in accordance with this Section 4.7 shall be binding upon each holder of any Registrable Securities then outstanding, each future holder of all such Registrable Securities, each Key Stockholder then a party to this Agreement,
and any future Key Stockholders of the Company. 
  

	17.	Effectiveness of Amendment. This Amendment shall be effective upon execution by the Company and the holders of at least a majority of the Registrable Securities currently
outstanding. 

  

	18.	Effect of Amendment. Except as amended as set forth above, the Agreement shall continue in full force and effect. 

  

	19.	Counterparts. This Amendment may be signed in one or more counterparts, each of which shall be deemed an original and all of which, taken together, shall be deemed one and
the same document. 

  

	20.	Interpretation of Drafting. The parties have participated jointly in the negotiation and drafting of this Amendment. In the event an ambiguity or question of intent or
interpretation arises, this Amendment shall be construed as if drafted jointly by the parties and no presumption or burden or proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Amendment,
nor shall comparisons to prior unexecuted drafts of this Amendment be admissible as evidence of intent or interpretation. 

  
 [Signature Page Follows] 
  
  

 A-15 

 IN WITNESS WHEREOF, the undersigned have executed this Amendment No. 1 to Investor’s Rights
Agreement as of the date first written above. 
  

			
	 THE COMPANY:
  
 NEXQL CORPORATION

		
	By:	 	 
	Name:	 	 
	Title:	 	 
	
	 THE KEY STOCKHOLDER:
  
 NEXQL HOLDINGS, LLC

		
	By:	 	 
	Name:	 	 
	Title:	 	 
	
	 THE INVESTOR:
  
 CROSSROADS SYSTEMS, INC.

		
	By:	 	 
	Name:	 	 
	Title:	 	 

  

 A-16 

 EXHIBIT C 
  
 Amendment No. 1 to First Refusal and Co-Sale Agreement 
  
  

 A-17 

 AMENDMENT No. 1 TO RIGHT OF FIRST REFUSAL AND CO-SALE AGREEMENT 
  
 THIS AMENDMENT No. 1 TO RIGHT OF FIRST REFUSAL AND CO-SALE AGREEMENT
dated as of March 22, 2005 (this “Amendment”) is made by and among NexQL Corporation, a Delaware corporation (the “Company”), the Key Stockholder and the Investor. Capitalized terms used but not
defined herein shall have the respective meanings assigned to them in that certain Right of First Refusal and Co-Sale Agreement dated as of December 16, 2003 (the “Agreement”) by and among the Company, the Key Stockholder and
the Investor. 
  
 RECITALS 
  
 WHEREAS, the Company, the Key Stockholder and the Investor are parties
to that certain Acquisition Option Agreement dated as of December 16, 2003 (the “Option Agreement”) providing for, among other things, the acquisition of the Company by the Investor upon the satisfaction of certain conditions
precedent, and the Company and the Investor are parties to a Loan and Security Agreement dated as of December 16, 2003 providing for, among other things, the financing of the Company by the Investor; 
  
 WHEREAS, the Company and the Investor are entering into an Amended and
Restated Loan and Security Agreement concurrently with the execution and delivery of this Agreement, whereby Investor would agree to provide additional financing to the Company, and, in connection with such transaction, are terminating the Option
Agreement, amending certain other agreements to which the Company and the Investor are parties, and providing for certain other rights in favor of the Investor; 
  

WHEREAS, in connection with the aforementioned transactions, the Company, the Key Stockholder and the Investor desire to amend the Agreement as
provided herein; and 
  
 WHEREAS, pursuant to Section 5.2
thereof, any term of the Agreement may be amended with the written consent of the Company, the Investor and the holders of at least a majority of the Common Stock then held, collectively, by all of the Key Stockholders. 
  
 AGREEMENT 
  
 NOW, THEREFORE, in consideration of the foregoing recitals and other
good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 
  

	21.	Amendment to Section 5.1. Section 5.1 of the Agreement is hereby amended and restated in its entirety to be and read as follows: 

  
 5.1 Termination. This Agreement shall terminate on the earlier of (a)
the closing of the sale of the Company’s Common Stock in a firm commitment, underwritten public offering registered under the Securities Act of 1933 as amended (the “Securities Act”), other than a registration relating
solely to a transaction under Rule 145 under the Securities Act (or any successor thereto) or to an 

  

 A-18 

 
employee benefit plan of the Company, at a public offering price (prior to underwriters’ discounts and expenses) equal to or exceeding $2.50 per share
of Common Stock (as adjusted for any stock dividends, combinations or splits with respect to such shares) and with aggregate proceeds to the Company (after deduction for underwriters’ discounts and expenses relating to the issuance, including
without limitation fees of the Company’s counsel) which exceed $20,000,000; (b) the sale of the Company (through a merger, consolidation, sale of all or substantially all of its assets or stock, or similar transaction); (c) the written
agreement of the Company, the holders of a majority of the shares of Common Stock then outstanding and held by all of the Key Stockholders (and any other party who is deemed to be a “Key Stockholder” for purposes of this Agreement) and the
Investor; (d) the acquisition by a single purchaser of all of the issued and outstanding shares of Common Stock; or (e) the effective time of any liquidation, winding up, or dissolution of the Company. 
  

	22.	Effectiveness of Amendment. This Amendment shall be effective upon execution by the Company, the Investor and the holders of at least a majority of the Common Stock then
held, collectively, by all of the Key Stockholders. 

  

	23.	Effect of Amendment. Except as amended as set forth above, the Agreement shall continue in full force and effect. 

  

	24.	Counterparts. This Amendment may be signed in one or more counterparts, each of which shall be deemed an original and all of which, taken together, shall be deemed one and
the same document. 

  

	25.	Interpretation of Drafting. The parties have participated jointly in the negotiation and drafting of this Amendment. In the event an ambiguity or question of intent or
interpretation arises, this Amendment shall be construed as if drafted jointly by the parties and no presumption or burden or proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Amendment,
nor shall comparisons to prior unexecuted drafts of this Amendment be admissible as evidence of intent or interpretation. 

  
 [Signature Page Follows] 
  
  

 A-19 

 IN WITNESS WHEREOF, the undersigned have executed this Amendment No. 1 to Right of First Refusal
and Co-Sale Agreement as of the date first written above. 
  

			
	 THE COMPANY:
  
 NEXQL CORPORATION

		
	By:	 	 
	Name:	 	 
	Title:	 	 
	
	 THE KEY STOCKHOLDER:
  
 NEXQL HOLDINGS, LLC

		
	By:	 	 
	Name:	 	 
	Title:	 	 
	
	 THE INVESTOR:
  
 CROSSROADS SYSTEMS, INC.

		
	By:	 	 
	Name:	 	 
	Title:	 	 

  

 A-20 

 EXHIBIT B 
  

Form of Secured Convertible Promissory Note 
  
 THIS PROMISSORY NOTE AND THE SHARES ISSUABLE UPON CONVERSION HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS
(COLLECTIVELY, THE “ACTS”), AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, ASSIGNED OR DISPOSED OF EXCEPT PURSUANT TO REGISTRATION UNDER SUCH ACTS OR UNLESS BORROWER HAS RECEIVED AN OPINION OF COUNSEL, OR OTHER EVIDENCE REASONABLY
SATISFACTORY TO BORROWER, THAT SUCH REGISTRATION IS NOT REQUIRED. 
  
 THIS
PROMISSORY NOTE IS SECURED BY CERTAIN ASSETS OF BORROWER. THE TERMS OF SUCH SECURITY INTEREST AND ADDITIONAL TERMS REGARDING THIS PROMISSORY NOTE ARE SET FORTH IN, AND CERTAIN TERMS OF THIS NOTE ARE SUBJECT TO, A LOAN AND SECURITY AGREEMENT BETWEEN
BORROWER AND THE HOLDER. 
  
 SECURED CONVERTIBLE PROMISSORY
NOTE 
  

					
	Up to $2,000,000	 	Austin, Texas	 	March 22, 2005

  
 NexQL Corporation, a
Delaware corporation (“Borrower”), for value received, promises to pay to the order of Crossroads Systems, Inc. (together with its successors and permitted assigns, “Holder”), the principal amount(s)
advanced as a loan or loans to Borrower in an aggregate principal amount payable to Holder of up to Two Million Dollars ($2,000,000) or such lesser amount outstanding, together with (i) interest in arrears from and including the date hereof on the
unpaid principal balance of such amount(s) or any portion thereof advanced to Borrower pursuant to that certain Amended and Restated Loan and Security Agreement dated as of March 22, 2005 (the “Loan Agreement”) and Section 3
of this Secured Convertible Promissory Note (this “Note”) from the date such advances are made at a rate of 6.0% per annum (except as otherwise provided in Section 5 below), and (ii) any and all other amounts due under this
Note. Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Loan Agreement. 
  
 1. Maturity Date. This Note shall be due and payable on the earliest to occur of (if not earlier converted pursuant to Section 4 below):

  
 (i) March 15, 2006; provided that in
the event that the Maturity Date is triggered solely as a result of the occurrence of the foregoing date and Lender has not elected to exercise the Conversion Option with respect to the full amount of Obligations then-outstanding under this Note and
Loan Agreement, Lender agrees that it will not demand payment under this Note (nor initiate or threaten to initiate any Insolvency 
  

 B-1 

 Proceedings against Borrower) until March 15, 2007; provided, however, that such forbearance shall
only be effective for so long as: (A) Borrower is actively seeking alternate purchasers of shares of its capital stock to consummate a Qualified Financing; (B) no other Insolvency Proceeding has been initiated by or against Borrower; (C) no
Liquidation Event (as defined below in clause (ii) of this definition) has occurred nor has Borrower agreed to or become bound with respect to a Liquidation Event, whether by definitive agreement or letter of intent, orally or in writing; and (D) no
Borrower Event of Default has occurred (other than a “Payment Default” under Section 9(a) of the Loan Agreement). 
  
 (ii) any liquidation, dissolution or winding up of Borrower, either voluntary or involuntary, and shall be deemed to be occasioned by, or
to include, (A) the acquisition of Borrower by another entity by means of any transaction or series of related transactions (including, without limitation, any reorganization, merger or consolidation) unless Borrower’s stockholders of record as
constituted immediately prior to such acquisition will, immediately after such acquisition (by virtue of securities issued as consideration for Borrower’s acquisition or otherwise) hold at least 50% of the voting power of the surviving or
acquiring entity (except that the sale by Borrower of shares of its capital stock to investors in bona fide common stock or preferred stock financing transactions shall not be deemed an acquisition for this purpose); (B) the sale of all or
substantially all of the assets of Borrower, including the sale of all or substantially all of the assets of Borrower’s subsidiaries, if such assets constitute substantially all of the assets of Borrower and such subsidiaries taken as a whole;
or (C) the grant of an exclusive irrevocable license of substantially all of Borrower’s intellectual property (any event set forth in this clause (ii) being referred to herein as a “Liquidation Event”); and 

 
 (iii) a Qualified Financing. 
  
 For purposes of this Note, a “Qualified Financing”
means the next equity financing of Borrower after the date hereof in which Borrower sells shares of its capital stock resulting in gross proceeds to Borrower (including any amounts converted pursuant to the terms of this Note) of at least
$5,000,000, excluding proceeds received upon the exercise of stock options issued to employees or service providers of Borrower. 
  
 2. Security. The obligations due under this Note are secured by all of the assets of Borrower pursuant to the Loan Agreement. Additional rights of
Holder are set forth in the Loan Agreement. 
  
 3. Borrowing
Procedure. Amounts under this Note will be made available by Holder as soon as reasonably practicable following Holder’s receipt of a properly completed Request for Advance in substantially the form attached hereto as Exhibit A (the
“Request for Advance”). Such Request for Advance shall be irrevocable and binding on Borrower. Upon fulfillment of these conditions set forth in the Request for Advance and the Loan Agreement, Holder shall make the Advances
available to Borrower in same-day funds, or such other funds as shall separately be agreed upon by Borrower and Holder, in accordance with the payment instructions provided to Holder in the Request for Advance. 
  

 B-2 

 Holder shall record the date and amount of each advance, the amount of principal and interest due and
payable from time to time hereunder, each payment thereof and the resulting unpaid principal balance hereof, on the schedule annexed to this Note, to which Holder may add additional pages. Each such record of any advance under this Note shall be
conclusive evidence that the advance was made to Borrower; provided that the failure to make any such record shall not in any way affect Borrower’s obligations under this Note. 
  
 4. Conversion. 
  
 (a) Automatic Conversion. In the event Borrower consummates a
Qualified Financing on or before the Maturity Date, all principal and accrued unpaid interest of this Note shall automatically be converted, in whole but not in part, upon the closing of such Qualified Financing into the shares of capital stock of
Borrower sold in the Qualified Financing (the “Qualified Financing Securities”), at the weighted average price per share paid in the Qualified Financing.. 
  
 (b) Optional Conversion. At any time on or prior to the Maturity Date, in the event Borrower consummates an equity
financing that is not a Qualified Financing (a “Next Equity Financing”), Holder may, at its option, convert the then-outstanding principal amount of this Note, together with any accrued but unpaid interest thereon into that
number of shares of securities of Borrower sold in such Next Equity Financing (the “Next Equity Financing Securities”) equal to the aggregate amount of principal and accrued but unpaid interest then outstanding under this
Note, divided by the weighted average price per share at which Next Equity Financing Securities were sold in the Next Equity Financing. 
  
 (c) Conversion Procedures. 
  
 (i) Automatic Conversion. Upon the automatic conversion of this Note, Borrower shall give written notice to Holder, notifying
Holder of such conversion and specifying the lowest price per share at which the Qualified Financing Securities were sold in the Qualified Financing, the principal amount of the Note converted and the date on which such conversion occurred and
calling upon Holder to surrender the Note to Borrower. Upon such conversion, Holder shall surrender this Note at Borrower’s principal executive office, or, if this Note has been lost, stolen, destroyed or mutilated, then, in the case of loss,
theft or destruction, Holder shall deliver an indemnity agreement reasonably satisfactory in form and substance to Borrower or, in the case of mutilation, Holder shall surrender and cancel this Note. Borrower shall, as soon as practicable
thereafter, issue and deliver to Holder at such principal executive office a certificate or certificates for the number of shares to which Holder shall be entitled upon such conversion (bearing such legends as are required by applicable state and
federal securities laws in the opinion of counsel to Borrower and any other agreements to which Holder is a party). Such conversion shall be deemed to have been made simultaneously with the initial closing of the Qualified Financing, and thereafter
Holder shall be treated for all purposes as the record holder of such shares. 
  
 (ii) Voluntary Conversion. If Holder elects to convert this Note into Common Stock, Holder shall notify Borrower in writing of such election. Upon the 
  

 B-3 

 delivery of such notice to Borrower, this Note shall convert into Common Stock as provided in subsection
(b) above. In connection with such conversion, Holder shall surrender this Note at Borrower’s principal executive office, or, if this Note has been lost, stolen, destroyed or mutilated, then, in the case of loss, theft or destruction, Borrower
shall deliver an indemnity agreement reasonably satisfactory in form and substance to Borrower or, in the case of mutilation, Holder shall surrender and cancel this Note. Borrower shall, as soon as practicable thereafter, issue and deliver to Holder
at such principal executive office a certificate or certificates for the number of shares to which Holder shall be entitled upon such conversion (bearing such legends as are required by applicable state and federal securities laws in the opinion of
counsel to Borrower and any other agreements to which Holder is a party). Thereafter, Holder shall be treated for all purposes as the record holder of such shares of Common Stock. 
  
 (d) Fractional Shares; Nonassessable; Effect of Conversion. Any fractional shares to be issued upon conversion of
this Note shall be rounded down to the nearest whole share. Borrower covenants that the shares of Qualified Financing Securities or Common Stock, as the case my be, issuable upon the conversion of this Note will, upon conversion of this Note, be
validly issued, fully paid and nonassessable and free from all taxes, liens and charges in respect of the issue thereof. Upon proper conversion of this Note in full, Borrower shall be forever released from all its obligations and liabilities under
this Note. 
  
 5. Payments; Interest Rate Adjustment;
Prepayment. 
  
 (a) Payments. Borrower will make all
payments due under this Note in immediately available funds by 11:00 a.m. (Austin, Texas time) on the date such payment is due in a manner that Holder or other registered holder of this Note may from time to time direct. All payments hereunder shall
be payable in lawful money of the United States of America that is legal tender for public and private debts at the time of payments. 
  
 (b) Interest Rate Adjustment. Until the earlier to occur of the Maturity Date or an Event of Default, Borrower shall not be required to make
payments of principal or interest. Thereafter, Borrower shall repay in full all principal and unpaid interest then outstanding under this Note (interest being computed on the basis of a 360-day year and actual days elapsed) at a rate of 6% per
annum; provided, however, in the event of any Liquidation Event (not involving Holder), the rate of interest on this Note shall be the lesser of 12% per annum or the highest lawful rate of interest and shall be deemed to have accrued
on all outstanding indebtedness under this Note as of the date of such Liquidation Event. 
  
 (c) Prepayment. This Note may not be prepaid by Borrower in whole or in part without the prior written consent of Holder. Any permitted prepayment will be made in lawful tender of the United States and will be
applied (a) first, to the payment of accrued interest and (b) second, (to the extent that the amount of such payment exceeds the amount of all such accrued interest), to the payment of principal. 
  
 6. Default. Borrower will be deemed to be in default under this Note
at any time there exists, and for such time as there continues, a Borrower Event of Default pursuant to the Loan Agreement. 
  

 B-4 

 7. Governing Law. THIS AGREEMENT SHALL BE GOVERNED IN ALL RESPECTS BY THE LAWS OF THE STATE OF
TEXAS AS SUCH LAWS ARE APPLIED TO AGREEMENTS BETWEEN TEXAS RESIDENTS ENTERED INTO AND TO BE PERFORMED ENTIRELY WITHIN TEXAS WITHOUT REGARD TO THE CONFLICTS OF LAWS PRINCIPLES THEREOF. 
  
 8. Notices. Any notice, request or other communication required or permitted hereunder shall be given in accordance
with the Loan Agreement. 
  

 B-5 

 IN WITNESS WHEREOF, Borrower has caused this Note to be executed by its officers thereunto duly
authorized. 
  

			
	NexQL Corporation
		
	By:	 	  

	Name:	 	  

	Title:	 	  

  

 B-6 

 Schedule I 
  
 Advances 
  

			
	 Date of Receipt of Funds

	  	 Amount of Advance

	 	  	 
	Total (As of                         )	  	 

  

 B-7 

 Exhibit A 
  
 Form of Request for Advance 
  
 NexQL Corporation (“Borrower”) hereby requests that Crossroads Systems, Inc. (“Lender”) wire
transfer $             (the “Advance”), an amount that is equal to or less than the amount that Borrower is then entitled to request as an Advance pursuant to
the Note, on or before March 15, 2006. Furthermore, Borrower hereby certifies that (i) the representations and warranties of Borrower set forth in Section 4(a)-(e) of that certain Amended and Restated Loan and Security Agreement dated as of March
22, 2005 (the “Loan Agreement”), are true and correct as of the date of this Request for Advance; (ii) there exists no Borrower Event of Default (as defined in the Loan Agreement) and no event that, but for the passage of
time or the giving of notice, or both, would constitute a Borrower Event of Default and (iii) a majority of the board of directors of Borrower, including at least one director designated by Lender has approved the budget for the fiscal quarter in
which Borrower requests this advance or has otherwise agreed in writing to this advance. 
  

				
	 Draw Amount Requested
	  	$	            
	 Total Principal Amount Outstanding (prior to this Advance)
	  	$	            
	 Facility Amount Remaining for Future Advances
	  	$	            

  
 Borrower hereby requests that Lender
wire the Draw amount in accordance with the following wiring instructions: 
  

	
	Account Holder
Name:                                       
                                 
	Bank
Name:                                       
                                        
          
	Bank
Address:                                      
                                        
        
	City, State,
Zip:                                       
                                        
     
	ABA Routing
Number:                                       
                                 
	Account
Number:                                       
                                        
  
	Contact
Name:                                       
                                        
      
	Telephone
Number:                                       
                                      

  
 This Advance is hereby requested this
             day of                     ,
200    . 
  

			
	NEXQL CORPORATION
		
	 By:
	 	  

	 Name:
	 	  

	 Title:
	 	  

  
  

 B-8 

 EXHIBIT C 
  

Form of Warrant 
  
 NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY STATE SECURITIES LAWS AND MAY
NOT BE TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS IT HAS BEEN REGISTERED UNDER SUCH ACT AND ALL SUCH APPLICABLE LAWS OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE. 
  
 NEXQL CORPORATION 
  
 Stock Purchase Warrant 
  
 1. Issuance. This Warrant is issued to Crossroads Systems, Inc. (the “Holder”) by NexQL Corporation, a Delaware
corporation (hereinafter with its successors called the “Company”). This Warrant is being issued pursuant to that certain Amended and Restated Loan and Security Agreement dated March 22, 2005, by and between the Company and
the Holder (the “Loan Agreement”). Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Loan Agreement. 
  
 2. Number of Warrant Shares; Exercise Price. 
  
 (a) In the event that the Company consummates a Qualified Financing (as defined below) prior to March 15, 2006 (together
with any additional time in which the Maturity Date under the Loan Agreement or the Note is extended pursuant to any forbearance by the Holder, the “Maturity Date”), then this Warrant shall be exercisable for that number of
Qualified Financing Shares (as defined below) equal to the quotient obtained by dividing (i) $500,000 by (ii) the weighted average price per share paid for the securities issued and sold in the Qualified Financing (the “Qualified
Financing Shares”). A “Qualified Financing” is a transaction, or series of related transactions, after the date hereof, in which the Company sells its securities in exchange for aggregate gross proceeds of at
least $5,000,000 (including cash and cancellation of existing indebtedness, including the Secured Convertible Promissory Note (the “Note”) issued by the Company pursuant to the Loan Agreement). 
  
 (b) In the event that the Company consummates an equity financing that is not
a Qualified Financing (a “Next Equity Financing”), then this Warrant shall be exercisable for that number of shares of securities of the Company sold in such Next Equity Financing (the “Next Equity Financing
Securities”) equal to the quotient obtained by dividing (i) $500,000 by (ii) the weighted average price per share at which Next Equity Financing Securities were sold in the Next Equity Financing. 
  
 (c) Except as set forth in subsection (b) above, the term
“Exercise Price” as used in this Warrant means the (i) weighted average price per share at which Qualified Financing Securities are sold in the Qualified Financing or (ii) weighted average price per share at which 

 

 C-1 

 Next Equity Financing Securities are sold in the Next Equity Financing. The term “Warrant Shares”
as used in this Warrant means (i) Qualified Financing Securities in the event the Company consummates a Qualified Financing on or before the Maturity Date or (ii) Next Equity Financing Securities in the event the Company consummates a Next Equity
Financing on or before the Maturity Date. 
  
 (d) Upon the
occurrence of a Qualified Financing or a Next Equity Financing, the Company shall provide Holder a notice stating the Exercise Price and the number of Warrant Shares for which this Warrant is exercisable, which calculations shall be subject to
verification and agreement by the Holder. 
  
 3. Payment of
Purchase Price. The Exercise Price may be paid (i) in cash or by check, (ii) by the surrender by the Holder to the Company of any promissory notes or other obligations issued by the Company, with all such notes and obligations so surrendered
being credited against the Purchase Price in an amount equal to the principal amount thereof plus accrued interest to the date of surrender, (iii) through delivery by the Holder to the Company of other securities issued by the Company, with such
securities being credited against the Purchase Price in an amount equal to the fair market value thereof, as determined in good faith by the Board of Directors of the Company (the “Board”), or (iv) by any combination of the
foregoing. The Board shall promptly respond in writing to an inquiry by the Holder as to the fair market value of any securities the Holder may wish to deliver to the Company pursuant to clause (iii) above. 
  
 4. Net Issue Election. In lieu of exercise pursuant to Section
3, the Holder may elect to receive, without the payment by the Holder of any additional consideration, shares equal to the value of this Warrant or any portion hereof by the surrender of this Warrant or such portion to the Company, with the net
issue election notice annexed hereto duly executed, at the office of the Company. Thereupon, the Company shall issue to the Holder such number of fully paid and nonassessable Warrant Shares as is computed using the following formula: 
  

	
	X = Y (A-B)
	        A

  
 Where: 
  
 X = the number of shares to be issued to the Holder pursuant to this Section
4. 
  
 Y = the number of shares covered by this Warrant in
respect of which the net issue election is made pursuant to this Section 4. 
  
 A = the fair market value of one Warrant Share, as determined in good faith by the Board, as at the time the net issue election is made pursuant to this Section 4. 
  
 B = the Exercise Price in effect under this Warrant at the time the net
issue election is made pursuant to this Section 4. 
  
 The Company shall promptly
respond in writing to an inquiry by the Holder as to the fair market value of one Warrant Share. 
  

 C-2 

 5. Partial Exercise. This Warrant may be exercised in part, and the Holder shall be
entitled to receive a new warrant, which shall be dated as of the date of this Warrant, covering the number of shares in respect of which this Warrant shall not have been exercised. 
  
 6. Issuance Date. The person or persons in whose name or names any certificate representing any Warrant Shares
issued hereunder shall be deemed to have become the holder of record of the shares represented thereby as at the close of business on the date this Warrant is exercised with respect to such shares, whether or not the transfer books of the Company
shall be closed. 
  
 7. Expiration Date. This
Warrant shall expire on the earlier to occur of: (i) the close of business on March 22, 2015; and (ii) the occurrence of a “Change of Control” in which the Holder acquires the Company by means of (A) any transaction or series
of related transactions (including, without limitation, any reorganization, merger or consolidation) unless the Company’s stockholders of record as constituted immediately prior to such acquisition will, immediately after such acquisition (by
virtue of securities issued as consideration for the Company’s acquisition or otherwise) hold at least 50% of the voting power of the surviving or acquiring entity (except that the sale by the Company of shares of its capital stock to the
Holder and/or other investors in common stock or preferred stock financing transactions shall not be deemed an acquisition for this purpose); or (B) the sale (i.e., the purchase by the Holder) of all or substantially all of the assets of the
Company, including the sale (i.e., the purchase by the Holder) of all or substantially all of the assets of the Company’s subsidiaries, if such assets constitute substantially all of the assets of the Company and such subsidiaries taken
as a whole. 
  
 8. Reserved Shares; Valid Issuance.
The Company covenants and agrees that all Warrant Shares that may be issued upon exercise hereof (and upon any conversion of Warrant Shares) will, upon issuance, be duly and validly issued, fully paid and non-assessable and no personal liability
will attach to the holder thereof. The Company further covenants and agrees that, during the period within which this Warrant may be exercised, the Company will at all times have authorized and reserved a sufficient number of shares of capital stock
as appropriate for issuance upon exercise of this Warrant (and the conversion of the Warrant Shares, if appropriate). 
  
 9. Stock Dividends. If after the Original Issue Date the Company shall subdivide its capital stock underlying this Warrant Stock, by
split-up or otherwise, or combine such capital stock, or issue additional shares of such capital stock in payment of a stock dividend on such capital stock, the number of shares issuable on the exercise of this Warrant shall forthwith be
proportionately increased in the case of a subdivision or stock dividend, or proportionately decreased in the case of a combination, and the Exercise Price shall forthwith be proportionately decreased in the case of a subdivision or stock dividend,
or proportionately increased in the case of a combination. 
  
 10. Mergers and Reclassifications. If after the original issue date of this Warrant there shall be any reclassification, capital reorganization or change of the Warrant Shares (other than as a result of a subdivision,
combination or stock dividend provided for in Section 9 hereof), or any consolidation of the Company with, or merger of the Company into, another corporation or other business organization (other than a consolidation or merger in which the Company
is the 
  

 C-3 

 continuing corporation and which does not result in any reclassification or change of the outstanding capital stock
underlying this Warrant), or any sale or conveyance to another corporation or other business organization of all or substantially all of the assets of the Company, then, as a condition of such reclassification, reorganization, change, consolidation,
merger, sale or conveyance, lawful provisions shall be made, and duly executed documents evidencing the same from the Company or its successor shall be delivered to the Holder, so that the Holder shall thereafter have the right to purchase, at a
total price not to exceed that payable upon the exercise of this Warrant in full, the kind and amount of shares of stock and other securities and property receivable upon such reclassification, reorganization, change, consolidation, merger, sale or
conveyance by a holder of the number of Warrant Shares that might have been purchased by the Holder immediately prior to such reclassification, reorganization, change, consolidation, merger, sale or conveyance, and in any such case appropriate
provisions shall be made with respect to the rights and interest of the Holder to the end that the provisions hereof (including without limitation, provisions for the adjustment of the Exercise Price and the number of shares issuable hereunder)
shall thereafter be applicable in relation to any shares of stock or other securities and property thereafter deliverable upon exercise hereof. 
  
 11. Fractional Shares. In no event shall any fractional shares of capital stock of the Company be issued upon any exercise of this Warrant.
If, upon exercise of this Warrant as an entirety, the Holder would, except as provided in this Section 11, be entitled to receive a fractional share of capital stock of the Company, then the Company shall issue the next higher number of full shares
of capital stock, issuing a full share with respect to such fractional share. 
  
 12. Certificate of Adjustment. Whenever the Exercise Price (including the adjustments to the Conversion Price pursuant to Section 2(b) hereof) is adjusted, as herein provided, the Company shall promptly
deliver to the Holder a certificate setting forth the Exercise Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment. 
  
 14. Notices of Record Date, Etc. In the event of: 
  
 (a) any taking by the Company of a record of the holders of any class of
securities for the purpose of determining the holders thereof who are entitled to receive any dividend or other distribution, or any right to subscribe for, purchase or otherwise acquire any shares of stock of any class or any other securities or
property, or to receive any other right, 
  
 (b) any
reclassification of the capital stock of the Company, capital reorganization of the Company, consolidation or merger involving the Company, or sale or conveyance of all or substantially all of its assets, or 
  
 (c) any voluntary or involuntary dissolution, liquidation or winding-up of
the Company, 
  
 then and in each such event the Company will mail or cause to be
mailed to the Holder a notice specifying (i) the date on which any such record is to be taken for the purpose of such dividend, distribution or right, and stating the amount and character of such dividend, distribution or right, or (ii) the date on
which any such reclassification, reorganization, consolidation, merger, sale or conveyance, dissolution, liquidation or winding-up is to take place, and the time, if any is to be 
  

 C-4 

 fixed, as of which the holders of record in respect of such event are to be determined. Such notice shall be mailed at
least 20 days prior to the date specified in such notice on which any such action is to be taken. 
  
 15. Amendment. The terms of this Warrant may be amended, modified or waived only with the written consent of the Company and the Holder.

  
 16. Warrant Register; Transfers, Etc.

  
 (a) The Company will maintain a register containing the
name and address of the Holders. The Holder may change its address as shown on the warrant register by written notice to the Company requesting such change. Any notice or written communication required or permitted to be given to the Holder may be
given by certified mail or delivered to the Holder at its address as shown on the warrant register. 
  
 (b) Subject to compliance with applicable federal and state securities laws, this Warrant may be transferred by the Holder with respect to any or all of
the shares purchasable hereunder. Upon surrender of this Warrant to the Company, together with the assignment hereof properly endorsed, for transfer of this Warrant as an entirety by the Holder, the Company shall issue a new warrant of the same
denomination to the assignee. Upon surrender of this Warrant to the Company, together with the assignment hereof properly endorsed, by the Holder for transfer with respect to a portion of the shares of capital stock of the Company purchasable
hereunder, the Company shall issue a new warrant to the assignee, in such denomination as shall be requested by the Holder hereof, and shall issue to such Holder a new warrant covering the number of shares in respect of which this Warrant shall not
have been transferred. 
  
 (c) In case this Warrant shall be
mutilated, lost, stolen or destroyed, the Company shall issue a new warrant of like tenor and denomination and deliver the same (i) in exchange and substitution for and upon surrender and cancellation of any mutilated Warrant, or (ii) in lieu of any
Warrant lost, stolen or destroyed, upon receipt of evidence reasonably satisfactory to the Company of the loss, theft or destruction of such Warrant (including a reasonably detailed affidavit with respect to the circumstances of any loss, theft or
destruction) and of indemnity reasonably satisfactory to the Company. 
  
 17. No Impairment. The Company will not, by amendment of its Certificate of Incorporation or through any reclassification, capital reorganization, consolidation, merger, sale or conveyance of assets, dissolution, liquidation,
issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking
of all such action as may be necessary or appropriate in order to protect the rights of the Holder. 
  
 19. No Rights or Liability as a Stockholder. This Warrant does not entitle the Holder hereof to any voting rights or other rights as a
stockholder of the Company. No provisions hereof, in the absence of affirmative action by the Holder hereof to purchase securities hereunder, and no enumeration herein of the rights or privileges of the Holder hereof shall give rise to any liability
of such Holder as a stockholder of the Company. 
  

 C-5 

 20. Governing Law. The provisions and terms of this Warrant shall be governed by and
construed in accordance with the internal laws of the State of Texas. 
  
 21. Successors and Assigns. This Warrant shall be binding upon the Company’s successors and assigns and shall inure to the benefit of the Holder’s successors, legal representatives and permitted assigns. 

 
 [Signature page follows] 
  

 C-6 

 IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officers thereunto duly
authorized. 
  

					
	Dated: March 22, 2005	 	NexQL Corporation
			
	 	 	By:	 	  

	 	 	Name:	 	  

	 	 	Title:	 	  

  

 C-7 

 Exercise Election Notice 
  

			
	To: NexQL Corporation	 	Date:                    

  
 Subscription

  
 The undersigned hereby subscribes for
             shares of                          covered
by this Warrant and herewith makes payment of the Exercise Price of such shares in full in the amount of $            . The certificate(s) for such shares shall be issued in the name
of the undersigned or as otherwise indicated below. 
  

	
	
	

	 Signature

	
	

	 Name for Registration

	
	

	 Mailing Address

  
 OR 
  
 Net Issue
Election Notice 
  
 The undersigned hereby elects under Section 4
to surrender the right to purchase              shares of              pursuant to this Warrant. The certificate(s)
for the shares issuable upon such net issue election shall be issued in the name of the undersigned or as otherwise indicated below. 
  

	
	
	

	 Signature

	
	

	 Name for Registration

	
	

	 Mailing Address

  

 C-8 

 Assignment 
  

For value received                     
hereby sells, assigns and transfers unto                      the within Warrant, and does hereby irrevocably constitute and appoint
                     its attorney to transfer the within Warrant on the books of the within named Company with full power of substitution on
the premises. 
  

			
	Dated:                    	 	 
		
	 	 	

  

	
	In the Presence of:
	  
  

  

 C-9 

 EXHIBIT D 
  

GRANT OF PATENT SECURITY INTEREST 
  
 WHEREAS, NexQL Corporation (“Grantor”), owns and uses in its business, and will in the future adopt and so use, various
intangible assets, including the Patent Collateral (as defined below); and 
  
 WHEREAS, pursuant to an Amended and Restated Loan and Security Agreement dated as of March 22, 2005 (the “Loan Agreement”), between NexQL Corporation (“Borrower”)
and Crossroads Systems, Inc. (“Lender”), Lender has agreed to make extensions of credit to Borrower (capitalized terms used but not defined herein have the respective meanings assigned to them in the Loan Agreement); and

  
 WHEREAS, in connection with the Loan Agreement, Grantor
has agreed to grant in favor of Lender a perfected security interest in, and Lender has agreed to become a secured creditor with respect to, Patent Collateral; 
  

NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, subject to the terms and
conditions of the Loan Agreement, Grantor hereby grants to Lender a security interest in all of Grantor’s right, title and interest in and to the following, in each case whether now or hereafter existing or in which Grantor now has or hereafter
acquires an interest and wherever the same may be located (the “Patent Collateral”): 
  
 (i) all patents and patent applications, the inventions and improvements described and claimed therein, and all patentable inventions,
including but not limited to the patents and patent applications listed on Schedule A; 
  
 (ii) all reissues, divisions, continuations, renewals, extensions and continuations-in-part of the foregoing; 
  
 (iii) all rights (A) to all income, profits, royalties,
damages and payments now or hereafter due and/or payable under and with respect thereto, including damages and payments for past, present or future infringements thereof, (B) to sue for past, present and future infringements thereof, and (C)
otherwise accruing under or pertaining to any of the foregoing throughout the world; 
  
 (iv) all licenses or user or other agreements granted to Grantor with respect to any of the foregoing, in each case whether now or
hereafter owned or used; and 
  
 (v) all causes
of action, claims and warranties now or hereafter owned or acquired by Grantor in respect of any of the items listed above. 
  
 Notwithstanding anything herein to the contrary, in no event shall the Patent Collateral include, and Grantor shall not be deemed to have granted a
security interest in, any of Grantor’s rights or interests in any license, contract or agreement to which Grantor is a party or any of its rights or interests thereunder to the extent, but only to the extent, that such a grant would, under

  

 D-1 

 the terms of such license, contract or agreement or otherwise, result in a breach of the terms of, or constitute a
default under any license, contract or agreement to which Grantor is a party; provided, that immediately upon the ineffectiveness, lapse or termination of any such provision, the Patent Collateral shall include, and Grantor shall be deemed to
have granted a security interest in, all such rights and interests as if such provision had never been in effect. 
  
 Grantor further acknowledges and affirms that the rights and remedies of Lender with respect to the security interest in the Patent Collateral granted
hereby are more fully set forth in the Security Agreement, the terms and provisions of which are incorporated by reference herein as if fully set forth herein. 
  

[Remainder of page intentionally left blank] 
  

 D-2 

 IN WITNESS WHEREOF, Grantor has caused this Grant of Patent Security Interest to be duly executed
and delivered by its duly authorized officer as of the 22nd day of March, 2005. 
  

			
	NEXQL CORPORATION
		
	 By:
	 	  

	 Name:
	 	  

	 Title:
	 	  

  

 D-3 

 SCHEDULE A 
 TO 
 GRANT OF PATENT SECURITY INTEREST 
  
 Patents Issued: 
  

							
	 Patent No.

	  	 Issue Date

	  	 Invention

	  	 Inventor

	 6,507,877
	  	1/14/2003	  	Asynchronous concurrent dual-stream FIFO	  	Ross
				
	 6,535,150
	  	3/18/2003	  	Method and apparatus for implementing run-length compression	  	Ross
				
	 6,334,123
	  	12/25/2001	  	Index relational processor	  	Ross
				
	 (EP) 959738.6
	  	 	  	Index relational processor	  	Ross

  
 Patents Pending:

  

									
	 Applicant’s
 Name

	  	 Date
 Filed

	  	 Application
 Number

	  	 Invention

	  	 Inventor

	 Cox
	  	6/18/2004	  	10/871858	  	Integrated Database Indexing System	  	Cox
					
	 Ross
	  	9/3/1999	  	09/389,567	  	Universal Configurable Serial Bit Stream Processor	  	Ross
					
	 Ross
	  	10/6/2000	  	09/684,761	  	Enhanced Boolean Processor with Parallel Input	  	Ross

  

 D-4Promissory Note to Master Security Agreement

 Exhibit 4.12 
  
 PROMISSORY NOTE 
 To Master Security Agreement No. 4081047 
  
  

 (Date) 
  
  
 FOR VALUE RECEIVED, Renovis, Inc., a Delaware corporation, located at the
address stated below (“Maker”) promises, jointly and severally if more than one, to pay to the order of Oxford Finance Corporation or any subsequent holder hereof (each, a “Payee”) at its office located at
133 N. Fairfax Street, Alexandria, VA 22314 or at such other place as Payee or the holder hereof may designate, the principal sum of Seven Hundred Sixty Seven Thousand Eight Hundred Nine and 48/100 Dollars ($767,809.48) with interest
on the unpaid principal balance, from the date hereof through and including the dates of payment, at a fixed interest rate of nine and fifty six hundredths percent (9.56%) per annum, in forty eight (48) consecutive monthly installments of principal
and interest as follows: 
  

									
	 Periodic
 Installment
	  	Amount	  	 	  	 	  	 
	 1-48
	  	$19,159.16	  	 	  	 	  	 

  
 each (“Periodic
Installment”) and a final installment which shall be in the amount of the total outstanding principal and interest. The first Periodic Installment shall be due and payable on or around March 25, 2005 and the following Periodic Installments
and the final installment shall be due and payable on the same day of each succeeding month (each, a “Payment Date”) beginning May 1, 2005. Maker agrees to pay any initial partial month interest payment from the actual day of Note
disbursement to the first day of the succeeding month following Note disbursement. Such installments have been calculated on the basis of a 360-day year of twelve 30-day months. Each payment may, at the option of the Payee, be calculated and applied
on an assumption that such payment would be made on its due date. 
  
 The
acceptance by Payee of any payment which is less than payment in full of all amounts due and owing at such time shall not constitute a waiver of Payee’s right to receive payment in full at such time or at any prior or subsequent time.

  
 The Maker hereby expressly authorizes the Payee to insert the date value is
actually given in the blank space on the face hereof and on all related documents pertaining hereto. 
  
 This Note may be secured by a security agreement, chattel mortgage, pledge agreement or like instrument (each of which is hereinafter called a “Security Agreement” and any Security Agreement, this Note
and any other document evidencing or securing this loan is hereinafter called a “Debt Document”). 
  
 Time is of the essence hereof. If any Periodic Installment or any other sum due under this Note or any Security Agreement is not received when due, the Maker agrees to
pay, in addition to the amount of each such Periodic Installment or other sum, a late payment charge of five percent (5%) of the amount of said installment or other sum, but not exceeding any lawful maximum. If (i) Maker fails to make payment of any
amount due hereunder; or (ii) Maker is in default under, or fails to perform under any term or condition contained in any Security Agreement, then the entire principal sum remaining unpaid, together with all accrued interest thereon and any other
sum payable under this Note or any Security Agreement, at the election of Payee, shall immediately become due and payable, with interest thereon at the lesser of twelve percent (12%) per annum or the highest rate not prohibited by applicable law
from the date of such accelerated maturity until paid (both before and after any judgment). 
  
 Notwithstanding anything to the contrary herein Maker may prepay in full any indebtedness hereunder upon five (5) days notice to the Payee. A principal prepayment shall be accompanied by payment of (i) all accrued and
unpaid interest and the outstanding principal balance of the Note and (ii) a premium of 5% of the principal prepaid if such prepayment shall occur in Year 1, a premium of 4% of the principal prepaid if such prepayment shall occur in Year 2 and a
premium of 3% of the principal prepaid if such prepayment shall occur in Year 3 and thereafter. Year 1 will mean the period consisting of the 1st through the 12th installments under this Note and subsequent years will refer to the subsequent twelve
monthly payment periods. A partial prepayment shall be applied to the principal components of the Periodic Installments in the inverse order of maturity. 
  
 The Maker and all sureties, endorsers, guarantors or any others (each such person, other than the Maker, an “Obligor”) who may at any time become liable
for the payment hereof jointly and severally consent hereby to any and all extensions of time, renewals, waivers or modifications of, and all substitutions or releases of, security or of any party primarily or secondarily liable on this Note or any
Security Agreement or any term and provision of either, which may be made, granted or consented to by Payee, and agree that suit may be brought and maintained against any one or more of them, at the election of Payee without joinder of any other as
a party thereto, and that Payee shall not be required first to foreclose, proceed against, or exhaust any security hereof in order to enforce payment of this Note. The Maker and each Obligor hereby waives presentment, demand for payment, notice of
nonpayment, protest, notice of protest, notice of dishonor, and all other notices in connection herewith, as well as filing of suit (if permitted by law) and diligence in collecting this Note or enforcing any of the security 

 
hereof, and agrees to pay (if and to the extent permitted by law) all reasonable expenses incurred in collection, including Payee’s actual and
reasonable attorneys’ fees. 
  
 Maker and Payee intend to strictly comply
with all applicable federal and Virginia laws, including applicable usury laws (or the usury laws of any jurisdiction whose usury laws are deemed to apply to the Note or any other Debt Document despite the intention and desire of the parties to
apply the usury laws of the Commonwealth of Virginia). Accordingly, the provisions of this paragraph shall govern and control over every other provision of this Note or any other Debt Document which conflicts or is inconsistent with this Section,
even if such provision declares that it controls. As used in this paragraph, the term “interest” includes the aggregate of all charges, fees, benefits or other compensation which constitute interest under applicable law,
provided that, to the maximum extent permitted by applicable law, (a) any non-principal payment shall be characterized as an expense or as compensation for something other than the use, forbearance or detention of money and not as interest,
and (b) all interest at any time contracted for, reserved, or charged shall be amortized, prorated, allocated and spread, in equal parts during the full term of the obligations. In no event shall Maker or any other person be obligated to pay, or
Payee have any right or privilege to reserve, receive or retain, (a) any interest in excess of the maximum amount of non-usurious interest permitted under the laws of the Commonwealth of Virginia or the applicable laws (if any) of the United States
or of any other state, or (b) total interest in excess of the amount which Payee could lawfully have contracted for, reserved, received, retained or charged had the interest been calculated for the full term of the obligations. On each day, if any,
that the interest rate (the “Stated Rate”) called for under this Note or any other Debt Document exceeds the maximum non-usurious rate, the rate at which interest shall accrue shall automatically be fixed by operation of this
sentence at the maximum non-usurious rate for that day. Thereafter, interest shall accrue at the Stated Rate unless and until the Stated Rate again exceeds the maximum non-usurious rate, in which case, the provisions of the immediately preceding
sentence shall again automatically operate to limit the interest accrual rate to the maximum non-usurious rate. The daily interest rates to be used in calculating interest at the maximum non-usurious rate shall be determined by dividing the
applicable maximum non-usurious rate by the number of days in the calendar year for which such calculation is being made. None of the terms and provisions contained in this Note or in any other Debt Document which directly or indirectly relate to
interest shall ever be construed without reference to this paragraph, or be construed to create a contract to pay for the use, forbearance or detention of money at an interest rate in excess of the maximum non-usurious rate. If the term of any
obligation is shortened by reason of acceleration of maturity as a result of any Event of Default or by any other cause, or by reason of any required or permitted prepayment, and if for that (or any other) reason Payee at any time, including but not
limited to, the stated maturity, is owed or receives (and/or has received) interest in excess of interest calculated at the maximum non-usurious rate, then and in any such event all of any such excess interest shall be canceled automatically as of
the date of such acceleration, prepayment or other event which produces the excess, and, if such excess interest has been paid to Payee, it shall be credited pro tanto against the then-outstanding principal balance of Maker’s obligations
to Payee, effective as of the date or dates when the event occurs which causes it to be excess interest, until such excess is exhausted or all of such principal has been fully paid and satisfied, whichever occurs first, and any remaining balance of
such excess shall be promptly refunded to its payor. 
  
 THE MAKER HEREBY
UNCONDITIONALLY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF, DIRECTLY OR INDIRECTLY, THIS NOTE, ANY OF THE RELATED DOCUMENTS, ANY DEALINGS BETWEEN MAKER AND PAYEE RELATING TO THE SUBJECT MATTER OF
THIS TRANSACTION OR ANY RELATED TRANSACTIONS. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT (INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND
ALL OTHER COMMON LAW AND STATUTORY CLAIMS.) THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS NOTE,
ANY RELATED DOCUMENTS, OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THIS TRANSACTION OR ANY RELATED TRANSACTION. IN THE EVENT OF LITIGATION, THIS NOTE MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT. 
  
 The Note constitutes the entire agreement of the Maker and Payee with respect to the subject
matter hereof and supercedes all prior understandings, agreements and representations, express or implied. 
  
 No variation or modification of this Note, or any waiver of any of its provisions or conditions, shall be valid unless in writing and signed by an authorized representative of Maker and Payee. Any such waiver,
consent, modification or change shall be effective only in the specific instance and for the specific purpose given. 
  
 Any provision in this Note, any Security Agreement or any other Debt Document which is in conflict with any statute, law or applicable rule shall be deemed omitted,
modified or altered to conform thereto. 
  
 Upon receipt of an affidavit of an
officer of Payee as to the loss, theft, destruction or mutilation of this Note or any Debt Document which is not of public record, and, in the case of any such loss, theft, destruction or mutilation, upon surrender and cancellation of such Note or
other Debt Document, Maker will issue, in lieu thereof, a replacement Note or other Debt Document in the principal amount then outstanding and otherwise of like tenor. 
  
 It is understood and agreed that this Note and all of the Debt Documents were negotiated and have been or will be delivered to Payee in the
Commonwealth of Virginia, which State the parties agree has a substantial relationship to the parties and to the underlying transactions embodied by this Note and the Debt Documents. Maker agrees to furnish to Payee at Payee’s office in
Alexandria, VA, all further instruments, certifications and documents to be furnished 

 
hereunder. The parties also agree that if collateral is pledged to secure the debt evidenced by this Note, that the state or states in which such collateral
is located each have a substantial relationship to the parties and to the underlying transaction embodied by this Note and the Debt Documents. 
  
 MAKER AGREES THAT THE PAYEE OF THIS NOTE SHALL HAVE THE OPTION BY WHICH STATE LAWS THIS NOTE SHALL BE GOVERNED AND CONSTRUED: (A) THE LAWS OF THE COMMONWEALTH OF
VIRGINIA; OR (B) IF COLLATERAL HAS BEEN PLEDGED TO SECURE THE DEBT EVIDENCED BY THIS NOTE, THEN BY THE LAWS OF THE STATE OR STATES WHERE THE COLLATERAL IS LOCATED, AT PAYEE’S OPTION. THIS CHOICE OF STATE LAWS IS EXCLUSIVE TO THE PAYEE OF THIS
NOTE. MAKER SHALL NOT HAVE ANY OPTION TO CHOOSE THE LAWS BY WHICH THIS NOTE SHALL BE GOVERNED. MAKER AND GUARANTORS HEREBY CONSENT TO THE EXERCISE OF JURISDICTION OVER IT BY ANY FEDERAL COURT SITTING IN VIRGINIA OR ANY VIRGINIA COURT SELECTED BY
PAYEE, FOR THE PURPOSES OF ANY AND ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THE NOTE, THE LOAN AGREEMENT AND ALL OTHER DOCUMENTS. MAKER IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH PROCEEDING BROUGHT IN ANY SUCH COURT, ANY CLAIM BASED ON THE CONSOLIDATION OF PROCEEDINGS IN SUCH COURTS IN WHICH PROPER VENUE MAY LIE IN DIVERGENT JURISDICTIONS, AND ANY CLAIM THAT ANY SUCH
PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. MAKER HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS
NOTE, THE OTHER DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY. 
  

					
	 	    	Renovis, Inc.
			
	 /S/    JEFF FARROW
	    	By:	  	/S/    JOHN C. DOYLE
	
	    	 	  	

	(Witness)	    	 	  	 
	 Jeff Farrow
	    	Name:	  	John C. Doyle
	
	    	 	  	

	(Print name)	    	 	  	 
	 Two Corporate Drive, So. San Francisco, CA 94080
	    	Title:	  	V. P., CFO
	
	    	 	  	

	(Address)	    	 	  	 
	 	    	Federal Tax ID #: 94-3353740
			
	 	    	Address:	  	Two Corporate Drive
	 	    	 	  	South San Francisco, CA 94080

 PROMISSORY NOTE 
 To Master Security Agreement No. 4081047 
  
  

 (Date) 
  
  
 FOR VALUE RECEIVED, Renovis, Inc., a Delaware corporation, located at the
address stated below (“Maker”) promises, jointly and severally if more than one, to pay to the order of Oxford Finance Corporation or any subsequent holder hereof (each, a “Payee”) at its office located at
133 N. Fairfax Street, Alexandria, VA 22314 or at such other place as Payee or the holder hereof may designate, the principal sum of One Hundred Ninety Five Thousand Six Hundred Seventy Four and 61/100 Dollars ($195,674.61), with
interest on the unpaid principal balance, from the date hereof through and including the dates of payment, at a fixed interest rate of nine and fifty six hundredths percent (9.56%) per annum, in forty two (42) consecutive monthly installments of
principal and interest as follows: 
  

									
	 Periodic
 Installment
	  	Amount	  	 	  	 	  	 
	 1-42
	  	$5,456.63	  	 	  	 	  	 

  
 each (“Periodic
Installment”) and a final installment which shall be in the amount of the total outstanding principal and interest. The first Periodic Installment shall be due and payable on or around March 25, 2005 and the following Periodic Installments
and the final installment shall be due and payable on the same day of each succeeding month (each, a “Payment Date”) beginning May 1, 2005. Maker agrees to pay any initial partial month interest payment from the actual day of Note
disbursement to the first day of the succeeding month following Note disbursement. Such installments have been calculated on the basis of a 360-day year of twelve 30-day months. Each payment may, at the option of the Payee, be calculated and applied
on an assumption that such payment would be made on its due date. 
  
 The
acceptance by Payee of any payment which is less than payment in full of all amounts due and owing at such time shall not constitute a waiver of Payee’s right to receive payment in full at such time or at any prior or subsequent time.

  
 The Maker hereby expressly authorizes the Payee to insert the date value is
actually given in the blank space on the face hereof and on all related documents pertaining hereto. 
  
 This Note may be secured by a security agreement, chattel mortgage, pledge agreement or like instrument (each of which is hereinafter called a “Security Agreement” and any Security Agreement, this Note
and any other document evidencing or securing this loan is hereinafter called a “Debt Document”). 
  
 Time is of the essence hereof. If any Periodic Installment or any other sum due under this Note or any Security Agreement is not received when due, the Maker agrees to
pay, in addition to the amount of each such Periodic Installment or other sum, a late payment charge of five percent (5%) of the amount of said installment or other sum, but not exceeding any lawful maximum. If (i) Maker fails to make payment of any
amount due hereunder; or (ii) Maker is in default under, or fails to perform under any term or condition contained in any Security Agreement, then the entire principal sum remaining unpaid, together with all accrued interest thereon and any other
sum payable under this Note or any Security Agreement, at the election of Payee, shall immediately become due and payable, with interest thereon at the lesser of twelve percent (12%) per annum or the highest rate not prohibited by applicable law
from the date of such accelerated maturity until paid (both before and after any judgment). 
  
 Notwithstanding anything to the contrary herein Maker may prepay in full any indebtedness hereunder upon five (5) days’ notice to the Payee. A principal prepayment shall be accompanied by payment of (i) all
accrued and unpaid interest and the outstanding principal balance of the Note and (ii) a premium of 5% of the principal prepaid if such prepayment shall occur in Year 1, a premium of 4% of the principal prepaid if such prepayment shall occur in Year
2 and a premium of 3% of the principal prepaid if such prepayment shall occur in Year 3 and thereafter. Year 1 will mean the period consisting of the 1st through the 12th installments under this Note and subsequent years will refer to the subsequent
twelve monthly payment periods. A partial prepayment shall be applied to the principal components of the Periodic Installments in the inverse order of maturity. 
  

The Maker and all sureties, endorsers, guarantors or any others (each such person, other than the Maker, an “Obligor”) who may at any time become
liable for the payment hereof jointly and severally consent hereby to any and all extensions of time, renewals, waivers or modifications of, and all substitutions or releases of, security or of any party primarily or secondarily liable on this Note
or any Security Agreement or any term and provision of either, which may be made, granted or consented to by Payee, and agree that suit may be brought and maintained against any one or more of them, at the election of Payee without joinder of any
other as a party thereto, and that Payee shall not be required first to foreclose, proceed against, or exhaust any security hereof in order to enforce payment of this Note. The Maker and each Obligor hereby waives presentment, demand for payment,
notice of nonpayment, protest, notice of protest, notice of dishonor, and all other notices in connection herewith, as well as filing of suit (if permitted by law) and diligence in collecting this Note or enforcing any of the security 

 
hereof, and agrees to pay (if and to the extent permitted by law) all reasonable expenses incurred in collection, including Payee’s actual and
reasonable attorneys’ fees. 
  
 Maker and Payee intend to strictly comply
with all applicable federal and Virginia laws, including applicable usury laws (or the usury laws of any jurisdiction whose usury laws are deemed to apply to the Note or any other Debt Document despite the intention and desire of the parties to
apply the usury laws of the Commonwealth of Virginia). Accordingly, the provisions of this paragraph shall govern and control over every other provision of this Note or any other Debt Document which conflicts or is inconsistent with this Section,
even if such provision declares that it controls. As used in this paragraph, the term “interest” includes the aggregate of all charges, fees, benefits or other compensation which constitute interest under applicable law,
provided that, to the maximum extent permitted by applicable law, (a) any non-principal payment shall be characterized as an expense or as compensation for something other than the use, forbearance or detention of money and not as interest,
and (b) all interest at any time contracted for, reserved, or charged shall be amortized, prorated, allocated and spread, in equal parts during the full term of the obligations. In no event shall Maker or any other person be obligated to pay, or
Payee have any right or privilege to reserve, receive or retain, (a) any interest in excess of the maximum amount of non-usurious interest permitted under the laws of the Commonwealth of Virginia or the applicable laws (if any) of the United States
or of any other state, or (b) total interest in excess of the amount which Payee could lawfully have contracted for, reserved, received, retained or charged had the interest been calculated for the full term of the obligations. On each day, if any,
that the interest rate (the “Stated Rate”) called for under this Note or any other Debt Document exceeds the maximum non-usurious rate, the rate at which interest shall accrue shall automatically be fixed by operation of this
sentence at the maximum non-usurious rate for that day. Thereafter, interest shall accrue at the Stated Rate unless and until the Stated Rate again exceeds the maximum non-usurious rate, in which case, the provisions of the immediately preceding
sentence shall again automatically operate to limit the interest accrual rate to the maximum non-usurious rate. The daily interest rates to be used in calculating interest at the maximum non-usurious rate shall be determined by dividing the
applicable maximum non-usurious rate by the number of days in the calendar year for which such calculation is being made. None of the terms and provisions contained in this Note or in any other Debt Document which directly or indirectly relate to
interest shall ever be construed without reference to this paragraph, or be construed to create a contract to pay for the use, forbearance or detention of money at an interest rate in excess of the maximum non-usurious rate. If the term of any
obligation is shortened by reason of acceleration of maturity as a result of any Event of Default or by any other cause, or by reason of any required or permitted prepayment, and if for that (or any other) reason Payee at any time, including but not
limited to, the stated maturity, is owed or receives (and/or has received) interest in excess of interest calculated at the maximum non-usurious rate, then and in any such event all of any such excess interest shall be canceled automatically as of
the date of such acceleration, prepayment or other event which produces the excess, and, if such excess interest has been paid to Payee, it shall be credited pro tanto against the then-outstanding principal balance of Maker’s obligations
to Payee, effective as of the date or dates when the event occurs which causes it to be excess interest, until such excess is exhausted or all of such principal has been fully paid and satisfied, whichever occurs first, and any remaining balance of
such excess shall be promptly refunded to its payor. 
  
 THE MAKER HEREBY
UNCONDITIONALLY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF, DIRECTLY OR INDIRECTLY, THIS NOTE, ANY OF THE RELATED DOCUMENTS, ANY DEALINGS BETWEEN MAKER AND PAYEE RELATING TO THE SUBJECT MATTER OF
THIS TRANSACTION OR ANY RELATED TRANSACTIONS. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT (INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND
ALL OTHER COMMON LAW AND STATUTORY CLAIMS.) THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS NOTE,
ANY RELATED DOCUMENTS, OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THIS TRANSACTION OR ANY RELATED TRANSACTION. IN THE EVENT OF LITIGATION, THIS NOTE MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT. 
  
 The Note constitutes the entire agreement of the Maker and Payee with respect to the subject
matter hereof and supercedes all prior understandings, agreements and representations, express or implied. 
  
 No variation or modification of this Note, or any waiver of any of its provisions or conditions, shall be valid unless in writing and signed by an authorized representative of Maker and Payee. Any such waiver,
consent, modification or change shall be effective only in the specific instance and for the specific purpose given. 
  
 Any provision in this Note, any Security Agreement or any other Debt Document which is in conflict with any statute, law or applicable rule shall be deemed omitted,
modified or altered to conform thereto. 
  
 Upon receipt of an affidavit of an
officer of Payee as to the loss, theft, destruction or mutilation of this Note or any Debt Document which is not of public record, and, in the case of any such loss, theft, destruction or mutilation, upon surrender and cancellation of such Note or
other Debt Document, Maker will issue, in lieu thereof, a replacement Note or other Debt Document in the principal amount then outstanding and otherwise of like tenor. 
  
 It is understood and agreed that this Note and all of the Debt Documents were negotiated and have been or will be delivered to Payee in the
Commonwealth of Virginia, which State the parties agree has a substantial relationship to the parties and to the underlying transactions embodied by this Note and the Debt Documents. Maker agrees to furnish to Payee at Payee’s office in
Alexandria, VA, all further instruments, certifications and documents to be furnished 

 
hereunder. The parties also agree that if collateral is pledged to secure the debt evidenced by this Note, that the state or states in which such collateral
is located each have a substantial relationship to the parties and to the underlying transaction embodied by this Note and the Debt Documents. 
  
 MAKER AGREES THAT THE PAYEE OF THIS NOTE SHALL HAVE THE OPTION BY WHICH STATE LAWS THIS NOTE SHALL BE GOVERNED AND CONSTRUED: (A) THE LAWS OF THE COMMONWEALTH OF
VIRGINIA; OR (B) IF COLLATERAL HAS BEEN PLEDGED TO SECURE THE DEBT EVIDENCED BY THIS NOTE, THEN BY THE LAWS OF THE STATE OR STATES WHERE THE COLLATERAL IS LOCATED, AT PAYEE’S OPTION. THIS CHOICE OF STATE LAWS IS EXCLUSIVE TO THE PAYEE OF THIS
NOTE. MAKER SHALL NOT HAVE ANY OPTION TO CHOOSE THE LAWS BY WHICH THIS NOTE SHALL BE GOVERNED. MAKER AND GUARANTORS HEREBY CONSENT TO THE EXERCISE OF JURISDICTION OVER IT BY ANY FEDERAL COURT SITTING IN VIRGINIA OR ANY VIRGINIA COURT SELECTED BY
PAYEE, FOR THE PURPOSES OF ANY AND ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THE NOTE, THE LOAN AGREEMENT AND ALL OTHER DOCUMENTS. MAKER IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH PROCEEDING BROUGHT IN ANY SUCH COURT, ANY CLAIM BASED ON THE CONSOLIDATION OF PROCEEDINGS IN SUCH COURTS IN WHICH PROPER VENUE MAY LIE IN DIVERGENT JURISDICTIONS, AND ANY CLAIM THAT ANY SUCH
PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. MAKER HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS
NOTE, THE OTHER DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY. 
  

					
	 	    	Renovis, Inc.
			
	 /S/     JEFF FARROW
	    	By:	  	/S/    JOHN C. DOYLE
	
	    	 	  	

	(Witness)	    	 	  	 
	 Jeff Farrow
	    	Name:	  	John C. Doyle
	
	    	 	  	

	(Print name)	    	 	  	 
	 Two Corporate Drive, So. San Francisco, CA 94080
	    	Title:	  	V. P., CFO
	
	    	 	  	

	(Address)	    	 	  	 
	 	    	Federal Tax ID #: 94-3353740
			
	 	    	Address:	  	Two Corporate Drive
	 	    	 	  	South San Francisco, CA 94080

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00081-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00081-of-00352.parquet"}]]