Document:

Sphere 3D Corporation: Exhibit 10.1 - Filed by newsfilecorp.com

    

    Exhibit 10.1

    July 14, 2020

    FBC Holdings Sárl
c/o Cyrus Capital Partners, LP
65 East 55th Street
New York, NY 10022e
United States

    Attention: Jennifer M. Pulick

    Dear Jennifer:

    Re:  Series B Preferred Shares of Sphere 3D Corp. 

    FBC Holdings Sárl (the "Shareholder") is the registered and beneficial owner of 6,500,000 Series B Preferred Shares ("Preferred Shares") of Sphere 3D Corp. (the "Corporation").

    For good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, by executing this letter agreement (this "Letter Agreement"), the Corporation and the Shareholder hereby agree as follows:

    1. The Shareholder hereby agrees that, during the Lockup Period, the undersigned will not, without the prior written consent of the Corporation, in its sole and unfettered discretion, convert any of the Preferred Shares into Common Shares of the Corporation; provided, that Shareholder shall only be subject to one Lockup Period pursuant to this Letter Agreement. For purposes of this Letter Agreement:

    (a) "Change of Control" means the acquisition by any Person, or group of Persons acting jointly or in concert within the meaning of the Securities Act (Ontario), of voting control or direction over an aggregate of 50% or more of the outstanding Common Shares and securities convertible into or carrying the right to acquire Common Shares (other than an internal reorganization or any transaction pursuant to which holders of Common Shares immediately prior to the transaction are entitled to exercise, directly or indirectly, 50% or more of the voting rights attaching to outstanding Common Shares and securities convertible into or carrying the right to acquire Common Shares immediately after the transaction);

    (b) "Common Shares" means Common Shares of the Corporation or any successor corporation;

    (c) "Lockup Period" means the period of time between (a) July 14, 2020 and (b) the earlier to occur of (1) April 30, 2021 and (2) the date that is 180 days after a Change of Control; and

    (d) "Person" means any natural person, corporation, firm, partnership, joint venture, trustee, executor, liquidator of a succession, administrator, legal representative or other unincorporated association, trust, unincorporated organization, government or governmental authority and pronouns relating thereto have a similar extended meaning.

    

    2. The Corporation hereby covenants that it will do all things necessary to duly convene a meeting of its shareholders (the "Meeting") by December 31, 2020 to vote on allowing the Shareholder to convert its Preferred Shares into Common Shares in the manner set forth, and as contemplated by, Section 7 of the Corporation's Certificate and Articles of Amendment as filed on July 12, 2019. In connection with the Meeting, the Corporation further covenants that it shall use its best efforts to support the adoption of such proposal, including, but not limited to, recommending that shareholders vote in favor of such proposal.

    3. The signature of any of the parties hereto may be evidenced by a facsimile, scanned e-mail or internet transmission copy of this letter agreement bearing such signature.

    4. This Letter Agreement may be signed in one or more counterparts, each of which so signed shall be deemed to be an original, and such counterparts together shall constitute one and the same instrument. Notwithstanding the date of execution or transmission of any counterpart, each counterpart shall be deemed to have the effective date first written above.

    5. This Letter Agreement shall be construed in accordance with the laws of the Province of Ontario and the laws of Canada applicable therein.

    Please indicate your acceptance of this Letter Agreement by executing the enclosed counterpart of this Letter Agreement and returning a copy to the undersigned.

    Yours truly,

    SPHERE 3D CORP.

    /s/ Peter Tassiopoulos

    Peter Tassiopoulos
Chief Executive Officer

    *******************

    ACKNOWLEDGED AND AGREED THIS 14TH  DAY OF JULY, 2020.

    	
                FBC HOLDINGS SÁRL

            	 
	 	 
	 	 
	
                /s/ Trustmoore Luxembourg S.A.

            	 
	
                Trustmoore Luxembourg S.A.

            	 
	
                Manager A

            	 
	 	 
	
                 

            	 
	
                /s/ Cyrus Capital Partners, L.P.

            	 
	
                Cyrus Capital Partners, L.P.

            	 
	
                Manager BExhibit 4.1

 

UNSECURED
PROMISSORY NOTE

 

	[Principal Amount]	New York City, New York
	 	[Date]

 

FOR VALUE RECEIVED, and subject to the
terms and conditions set forth herein, DPW Holdings, Inc., a Delaware corporation (hereinafter referred to as “Maker”),
hereby unconditionally promises to pay to Esousa Holdings LLC a New York limited liability company (and together with its successors
and assigns, hereinafter referred to as “Holder”), in the manner hereinafter provided, the aggregate principal
sum of [Principal Amount], or, if less, the aggregate unpaid principal amount of all advances made from time to time by Holder
to Maker pursuant to and in accordance with this Note, in immediately available funds and in lawful money of the United States
of America, together with interest thereon, all in accordance with the provisions hereinafter specified.

 

1.       Advance.
On the date hereof, Maker received an advance of the aggregate principal sum of [Principal Amount] from Holder. Amounts advanced
hereunder and repaid may not be reborrowed.

 

2.       Accrual
of Interest. Interest shall accrue and be computed on the principal amount outstanding from time to time under this Note until
the same is repaid in full at a rate equal twelve percent (12%) per annum. Interest shall be calculated hereunder on the basis
of a 360-day year for the actual number of days elapsed.

 

3.       Payment
of Interest. Maker shall pay interest on this Note on the Maturity Date (as hereafter defined) to Holder. Interest payable
on this Note shall be paid on the Maturity Date in cash. During the continuance of an Event of Default, notwithstanding anything
else to the contrary contained in this Note, interest payable on the outstanding principal hereunder shall bear interest at the
then applicable interest rate set forth in the immediately preceding section plus thirteen percent (13%) per annum; provided, however,
that such rate shall be increased or decreased to reflect the maximum interest rate permitted under applicable law. Such interest
shall be payable in cash upon demand.

 

4.       Maturity
Date. The entire unpaid principal amount of this Note, together with all accrued unpaid interest, shall be due and payable
on [Three months from the date of delivery] (the “Maturity Date”) or, if earlier, the date on which this Note
is declared due and payable pursuant to the terms of this Note, including without limitation as provided in Section 9 of this Note.

 

5.       Intentionally
Omitted.

 

6.       Manner
and Application of Payments. All amounts payable in cash hereunder shall be payable to Holder by wire transfer of immediately
available funds and in lawful money of the United States of America without set-off, deduction or counterclaim at such place as
Holder may from time to time designate in writing to Maker. Payments hereunder shall be applied first to interest and then to principal
outstanding hereunder, except that if Holder has incurred any cost or expense in connection with the enforcement or collection
of the obligations of Maker hereunder, Holder shall have the option of applying any monies received from Maker to payment of such
costs or expenses plus interest thereon before applying any of such monies to any interest or principal then due. If any payment
of principal or interest under this Note shall be payable on a day other than a business day such payment shall be made on the
next succeeding business day and interest shall be payable at the rate specified in this Note during such extension. The books
and records of Holder shall be the best evidence of any amounts at any time owed under this Note (including but not limited to
principal, interest and any fees owed hereunder) and shall be conclusive absent manifest error.

 

7.       Representation
and Warranties. Maker hereby represents and warrants to Holder that:

 

(i)       Maker
is validly existing as a corporation under the laws of the State of Delaware and has the power and authority to execute and deliver
this Note and has duly executed and delivered this Note;

  

(ii)       this
Note is the legal, valid and binding obligation of Maker, enforceable in accordance with its terms;

 

    	 	 	 

    	 

    

 

(iii)       the
execution, delivery and performance of this Note and the borrowing evidenced hereby does not (i) require the consent or approval
of any other party (including any governmental or regulatory party), (ii) violate any law, regulation, agreement, order, writ,
judgment, injunction, decree, determination or award presently in effect to which Maker is a party or to which Maker or any of
its assets may be subject, or (iii) conflict with or constitute a breach of, or default under, or require any consent under, or
result in the creation of any lien, charge or encumbrance upon the property or assets of Maker pursuant to any other agreement
or instrument (other than any pledge of or security interest granted in any collateral pursuant to this Note) to which Maker is
a party or is bound or by which its properties may be bound or affected; and

 

(iv)       there
are no actions, suits, investigations or proceedings pending or, to the best of Maker’s knowledge, threatened at law, in
equity, in arbitration or by or before any other authority involving or affecting Maker that are likely to have a material adverse
effect on the financial condition of Maker.

 

8.       Covenants.

 

(i)       Further
Assurances. Maker shall execute, acknowledge and deliver, or cause to be executed, acknowledged or delivered, any and all such
further assurances and other agreements or instruments, and take or cause to be taken all such other action, as shall be reasonably
necessary from time to time to give full effect to the Note and the obligations hereunder.

 

(ii)       Maintenance
of Existence. Maker shall preserve, renew and maintain in full force and effect its corporate or organizational existence and
take all reasonable action to maintain all rights and privileges necessary or desirable in the ordinary course of business except
as would not have a materially adverse effect.

 

(iii)       Notices
of Defaults. As soon as possible and in any event within two (2) business days after Maker becomes aware of a Default or Event
of Default under this Note, Maker shall notify Holder in writing of the nature and extent of such default or event of default and
the action, if any, Maker has taken or proposes to take with respect to such default or event of default.

 

9.       Events
of Default. Each of the following acts, events or circumstances shall constitute an Event of Default (each an “Event
of Default”) hereunder:

 

(i)       Maker
shall default in the payment when due (in accordance with the terms of this Note) of any principal;

 

(ii)       Maker
shall default in the payment when due (in accordance with the terms of this Note) of any interest or other amounts owing hereunder,
and such default is not cured within three (3) business days of the due date;

 

(iii)       (a)
Maker shall commence a voluntary case concerning itself under any bankruptcy, insolvency or similar laws or statutes (including
Title 11 of the United States Code, as amended, supplemented or replaced) (collectively, the “Bankruptcy Code”);
or (b) an involuntary case is commenced against Maker and is not dismissed within ninety (90) days; or (c) a custodian (as defined
in the Bankruptcy Code) is appointed for, or takes charge of, all or substantially all of the property of Maker or Maker commences
any other proceeding under any reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation
or similar law of any jurisdiction whether now or hereafter in effect relating to Maker or there is commenced against Maker any
such proceeding; or (d) any order of relief or other order approving any such case or proceeding is entered; or (e) Maker is adjudicated
insolvent or bankrupt; or (f) Maker makes a general assignment for the benefit of creditors; or (g) Maker shall call a meeting
of its creditors with a view to arranging a composition or adjustment of its debts; or (h) Maker shall by any act or failure to
act consent to, approve of or acquiesce in any of the foregoing;

 

(iv)       Maker
shall dissolve or for any reason cease to be in existence;

 

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(v)       any
representation or warranty made or that is deemed made by Maker shall have been false or misleading in any material respect on
the date as of which such representation or warranty was made or deemed made;

 

(vi)       Maker
shall fail to perform or observe any agreement, covenant or obligation arising under any provision hereof for more than thirty
(30) days following receipt by Maker of a notice from Holder indicating any such violation; and

 

(vii)       any
material adverse effect shall occur with respect to (a) the validity or enforceability of this Note or the rights, powers and privileges
purported to be created hereby, (b) the right rights and remedies of the Holder hereunder, (c) Maker’s ability to perform
any of its obligations hereunder, or (d) the business, assets, properties, liabilities (actual or contingent), operations or condition
(financial or otherwise) of Maker.

 

If an Event of Default, other than an Event
of Default described in clause (iii) of this section, occurs, Holder by written notice to Maker may declare the principal of and
accrued interest on this Note to be immediately due and payable. Upon a declaration of acceleration, such principal and interest
shall become immediately due and payable. If an Event of Default described in clause (iii) of this Section occurs, the principal
of and accrued interest on this Note then outstanding shall become immediately due and payable without any declaration or other
act on the part of Holder.

 

As used herein, the term “Default”
means any event or condition which constitutes an Event of Default or which upon notice, lapse of time or both would, unless cured
or waived, become an Event of Default.

 

10.       Remedies;
Cumulative Rights. In addition to the rights provided under the immediately preceding Section, Holder shall also have any other
rights that Holder may have been afforded under any contract or agreement at any time, and any other rights that Holder may have
pursuant to applicable law. No delay on the part of Holder in the exercise of any power or right under this Note or under any other
instrument executed pursuant hereto shall operate as a waiver thereof, nor shall a single or partial exercise of any power or right
preclude other or further exercise thereof or the exercise of any other power or right. No extension of time of the payment of
this Note or any other modification, amendment or forbearance made by agreement with any person now or hereafter liable for the
payment of this Note shall operate to release, discharge, modify, change or affect the liability of any co-borrower, endorser,
guarantor or any other person with regard to this Note, either in part or in whole. No failure on the part of Holder or any holder
hereof to exercise any right or remedy hereunder, whether before or after the occurrence of a default, shall constitute a waiver
thereof, and no waiver of any past default shall constitute a waiver of any future default or of any other default. No failure
to accelerate the debt evidenced hereby by reason of an Event of Default hereunder or acceptance of a past due installment, or
indulgence granted from time to time shall be construed to be a waiver of the right to insist upon prompt payment thereafter, or
to impose late payment charges, or shall be deemed to be a novation of this Note or any reinstatement of the debt evidenced hereby,
or a waiver of such right of acceleration or any other right, or be construed so as to preclude the exercise of any right which
Holder or any holder hereof may have, whether by the laws of the State of New York, by agreement or otherwise, and none of the
foregoing shall operate to release, change or affect the liability of Maker under this Note, and Maker hereby expressly waives
(to the extent allowed by law) the benefit of any statute or rule of law or equity which would produce a result contrary to or
in conflict with the foregoing.

 

11.       Attorneys’
Fees. Maker agrees to pay all costs and expenses of collection and enforcement of this Note when incurred, including Holder’s
reasonable attorneys’ fees and legal and court costs, including any incurred on appeal or in connection with bankruptcy or
insolvency, whether or not any lawsuit or proceeding is ever filed with respect hereto.

 

    	 	3	 

    	 

    

 

12.       Waivers.
Except for the notices expressly required by the terms of this Note (which rights to notice are not waived by Maker), Maker, for
itself and its successors and assigns, hereby forever waives presentment, protest and demand, notice of protest, demand, dishonor
and non-payment of this Note, and all other notices in connection with the delivery, acceptance, performance, default or enforcement
of the payment of this Note, and waives and renounces (to the extent allowed by law), all rights to the benefits of any statute
of limitations and any moratorium, appraisement, and exemption now allowed or which may hereby be provided by any federal or state
statute or decisions against the enforcement and collection of the obligations evidenced by this Note and any and all amendments,
substitutions, extensions, renewals, increases, and modifications hereof. Maker expressly agrees that this Note may be extended
or subordinated, by forbearance or otherwise, from time to time, without in any way affecting the liability of Maker. No consent
or waiver by Holder with respect to any action or failure to act which without such consent or waiver would constitute a breach
of any provision of this Note shall be valid or binding unless in writing signed by Holder and then only to the extent expressly
specified therein. Neither the failure nor any delay in exercising any right, power or privilege under this Note, at law or equity,
or otherwise available agreement, will operate as a waiver of such right, power or privilege and no single or partial exercise
of any such right, power or privilege by Holder will preclude any other or further exercise of such right, power or privilege.

 

13.       Notices.
Any notices required or permitted to be given under the terms of this Note shall be sent or delivered personally or by courier
(including a recognized, receipted overnight delivery service) or by facsimile (with a copy sent by a recognized, receipted overnight
delivery service) and shall be effective upon receipt, if delivered personally or by courier (including a recognized overnight
delivery service) or by facsimile, in each case addressed to Maker or Holder. The addresses for such communications shall be:

 

If to Maker:

 

DPW Holdings, Inc.

201 Shipyard Way, Suite E

Newport Beach, CA 92663

Attention: Milton C. Ault, III

Telephone: (949) 444-5464

Facsimile: (949) 444-5464

If to Holder:

 

Esousa Holdings LLC

211 East 43rd Street, Suite 402

New York, NY 10017

Attention: Michael Wachs

Telephone: (646) 278-6785

Facsimile: (212) 732-1131

 

Maker or Holder shall provide notice to
the other of any change in its address.

 

14.       Usury.
All terms, conditions and agreements herein are expressly limited so that in no contingency or event whatsoever, whether by acceleration
of maturity of the unpaid principal balance hereof, or otherwise, shall the amount paid or agreed to be paid to Holder for the
use, forbearance or detention of the money advanced hereunder exceed the highest lawful rate permissible under applicable laws.
If, from any circumstances whatsoever, fulfillment of any provision hereof shall involve transcending the limit of validity prescribed
by law which a court of competent jurisdiction, in a final determination may deem applicable hereto, then ipso facto, the obligation
to be fulfilled shall be reduced to the limit of such validity, and if under any circumstances Holder shall ever receive as interest
an amount which would exceed the highest lawful rate, such amount which would be excessive interest shall be applied to reduction
of the unpaid principal balance due hereunder and not to the payment of interest.

 

15.       Severability;
Invalidity. Maker and Holder intend and believe that each provision in this Note comports with all applicable local, state
and federal laws and judicial decisions. However, if any provisions, provision, or portion of any provision in this Note is found
by a court of competent jurisdiction to be in violation of any applicable local, state or federal ordinance, statute, law, or administrative
or judicial decision, or public policy, including applicable usury laws, and if such court would declare such portion, provision
or provisions of this Note to be illegal, invalid, unlawful, void or unenforceable as written, then it is the intent of all parties
hereto that such portion, provision or provisions shall be given force and effect to the fullest possible extent they are legal,
valid and enforceable, and the remainder of this Note shall be construed as if such illegal, invalid, unlawful, void or unenforceable
portion, provision or provisions were severable and not contained herein, and the rights, obligations and interest of Maker and
Holder under the remainder of this Note shall continue in full force and effect.

 

    	 	4	 

    	 

    

 

16.       No
Strict Construction. The language used in this Note shall be deemed to be the language chosen by the parties hereto to express
their mutual intent, and no rule of strict construction shall be applied against any party.

 

17.       Assignment.
Maker may not transfer, assign or delegate any of its rights or obligations hereunder without the prior written consent of Holder.
Holder shall have the right, without the consent of Maker, to transfer or assign, in whole or in part, its rights and interests
in and to this Note, and, as used herein, the term “Holder” shall mean and include such successors and assigns. This
Note shall accrue to the benefit of Holder and its successors and assigns and shall be binding upon the undersigned and its successors
and assigns.

 

18.       Amendment.
The provisions of this Note may be amended only by a written instrument signed by Maker and Holder.

 

19.       Governing
Law. THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF ALL PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED UNDER THE LAWS OF
THE STATE OF NEW YORK.

 

20.       Jurisdiction;
Waiver of Jury Trial. ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS NOTE SHALL BE FILED, TRIED AND LITIGATED IN
THE STATE AND FEDERAL COURTS LOCATED IN NEW YORK CITY, NEW YORK. MAKER WAIVES ITS RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF THIS NOTE, INCLUDING CONTRACT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY
CLAIMS. MAKER HAS REVIEWED THIS WAIVER AND KNOWINGLY AND VOLUNTARILY WAIVES THE AFORESAID TRIAL RIGHTS FOLLOWING CONSULTATION WITH
LEGAL COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF THIS NOTE MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

 

[Remainder Of Page Intentionally Left
Blank; Signature Page Follows]

 

    	 	5	 

    	 

    

 

EXECUTED AND DELIVERED as of the first date written
above.

 

	MAKER:	 	DPW HOLDINGS, INC.
	 	 	 
	 	 	 
	 	 	 
	 	 	By:	
         

	 	 	Name:	
        Milton C. Ault, III

	 	 	Title:	
        Chief Executive Officer
	 
	 	 	 	 	 	 	 

 

 

 

 

 

	ACKNOWLEDGED:	 	ESOUSA HOLDINGS, LLC
	 	 	 
	 	 	 
	 	 	 
	 	 	By:	
         

	 	 	Name:	
        Michael Wachs

	 	 	Title:	
        Managing Member

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