Document:

EXHIBIT
10.29

 

PROMISSORY
NOTE

 

	
  $792,000

  	
  January 4,
  2001

  
	
   

  	
  New York, New
  York

  

 

FOR VALUE RECEIVED, the
undersigned, James Molenda, (the “Payor”), with
an address at                           ,
promises to pay to the order of Nexsan Corporation,
a Delaware corporation (“Payee”) with offices at c/o Beachtree Capital, Ltd., l
Rockefeller Plaza, New York, NY 10020, the principal amount of Seven Hundred
Ninety Two Thousand ($792,000) Dollars, in such coin or currency of the United
States of America as at the time of payment shall be legal tender for the
payment of public or private debts, together with interest thereon at the rate
of 5.61% per annum. Interest accrued hereunder shall be due and payable on the
stated or any accelerated maturity date, and the principal amount hereof,
together with all accrued but unpaid interest thereon, shall be paid on the
fifth anniversary of the date hereof.

 

This Note is issued by
the Payor as payment in connection with the purchase by the Payor of one
million two hundred thousand (1,200,000) shares of the common stock (“Common
Stock”) of the Payee pursuant to a Restricted Stock Purchase Agreement
dated the date hereof and is entitled to the benefits thereof.

 

1.                                       Events
of Default.

 

(a)                                  Upon
the occurrence of any of the following events (hereinafter called “Events of
Default”) which shall have occurred and be continuing:

 

(i)                                     The
Payor shall default in any payment of principal or interest due under this Note
and fail to cure such default within ten days after notice thereof;

 

(ii)                                  (1) The
Payor shall commence any proceeding or other action relating to him in
bankruptcy or seek readjustment of his debts, receivership, composition or any
other relief under the Bankruptcy Act, as amended, or under any other
insolvency, readjustment of debt or any other similar act or law, of any
jurisdiction, domestic or foreign, now or hereafter existing; or (2) the
Payor shall admit the material allegations of any petition or pleading in
connection with any such proceeding; or (3) the Payor makes a general
assignment for the benefit of his creditors;

 

(iii)                               (1) The
commencement of any proceedings or the taking of any other action against the
Payor in bankruptcy or seeking the reorganization, arrangement or readjustment
of his debts, or any other relief under the Bankruptcy Act, as amended, or
under any other insolvency, readjustment of debt or any other similar act or
law of any jurisdiction, domestic or foreign, now or hereafter existing and the
continuance of any of such events for sixty (60) days undismissed, unbonded or
undischarged; or (2) the issuance of a warrant of attachment, execution or
similar process against substantially all of the property of the Payor and the
continuance of such event for thirty (30) days undismissed, unbonded and undischarged;
or

 

 

(iv)                              (1)The
Payor voluntarily elects to terminate his or her employment agreement with, or
his or her arrangement for the provision of services to, the Payee, or (2) the
Payee elects to terminate the Payor’s employment or service agreement for
Cause, as such term is defined in the Option Plan, then, and in any such event,
the Payee may, by written notice to the Payor, declare the entire unpaid
principal amount of this Note, together with all accrued but unpaid interest
thereon, due and payable, and the same shall forthwith become due and payable
upon without presentment, demand, protest, or other notice of any kind, all of
which are expressly waived.

 

(b)                                 Non-Waiver
and Other Remedies. No course of dealing or delay on the part of the holder
of this Note in exercising any right hereunder shall operate as a waiver
thereof or otherwise prejudice the rights of the holder of this Note. No remedy
conferred hereby shall be exclusive of any other remedy referred to herein or
now or hereafter available at law, in equity, by statute or otherwise.

 

2.                                       Security.

 

(a)                                  Pledge
Agreement. This Note is secured by a Pledge Agreement between the Payor and
the Payee, dated of even date herewith (the “Pledge Agreement”),
pursuant to which the Payor has pledged the Common Stock as collateral for
payment hereunder.

 

(b)                                 Recourse.
No recourse under or upon any obligation, covenant or agreement of this Note,
or for any claim based hereon or otherwise in respect hereof, shall be had
against the Payor or his assigns, except (i) for accrued and unpaid
interest, and (ii) in the event the amount actually applied to the payment
of principal of this Note after payment of costs and expenses and accrued but
unpaid interest hereon upon any sale by the Payee of the Common Stock (or any
other collateral held as security for this Note) pursuant to Section 3 of
the Pledge Agreement, or otherwise, is less than the original principal amount
hereof, then this Note shall be with recourse to the Payor as to not more than
thirty three and one-third percent (33 1/3 %) of the principal remaining unpaid
immediately prior to such application.

 

3.                                       Prepayment.
The indebtedness evidenced by this Note may be prepaid by the Payor at any time
in whole or in part from time to time, without premium or penalty, provided
that any prepayment of any portion of the outstanding principal amount hereof
shall be accompanied by all accrued but unpaid interest thereon.

 

4.                                       Lost
Documents. Upon receipt by the Payor of evidence reasonably satisfactory to
him of the loss, theft, destruction or mutilation of this Note or any Note
exchanged for it, and (in the case of loss, theft or destruction) of indemnity
reasonably satisfactory to him, and upon reimbursement to the Payor of all
reasonable expenses incidental thereto, and upon surrender and cancellation of
such Note, if mutilated, the Payor will make and deliver to the Payee in lieu
of such Note a new Note of like tenor and unpaid principal amount and dated as
of the original date of this Note.

 

5.                                       No
Presentment, etc. The Payor and any endorsers, sureties and guarantors of
this Note waive presentment for payment, demand, protest, notice of protest and
notice of dishonor hereof, and all other notices to which they may be entitled.

 

2

 

6.                                       Miscellaneous.

 

(a)                                  Parties
in Interest. All covenants, agreements and undertakings in this Note by and
on behalf of any of the parties hereto shall bind and inure to the benefit of
the respective permitted successors and assigns of the parties hereto whether
so expressed or not.

 

(b)                                 Notices.
All notices, requests, consents and demands shall be made in writing and shall
be sent, and deemed delivered, in the manner prescribed in Paragraph 12 of the
Pledge Agreement.

 

(c)                                  Waiver.
The failure of the Payee to exercise any right or remedy granted to him
hereunder on any one or more instances, shall not constitute a waiver of any
default by the Payee, and all such rights and remedies shall remain
continuously in force. No delay or omission in the exercise or enforcement by
the Payee of any rights or remedies shall be construed as a waiver of any right
or remedy of the Payee; and no exercise or enforcement of any such right or
remedy shall be held to exhaust any other right or remedy of the Payee.

 

(d)                                 Illegality.
If any one or more of the provisions contained in this Note shall for any
reason be held to be invalid, illegal or unenforceable, such invalidity,
illegality or unenforceability shall not affect any other provisions of this
Note and this Note shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein.

 

(e)                                  Amendment.
This Note may not be changed orally, but only by an instrument in writing duly
executed by the party against which enforcement of any waiver, change,
modification or discharge is sought.

 

(f)                                    Construction.
This Note shall be construed and enforced in accordance with, and the rights of
the parties shall be governed by, the laws of the State of New York.

 

3

 

IN WITNESS WHEREOF, this
Note has been executed and delivered by the Payor on the date specified above.

 

	
   

  	
  By:

  	
  /s/ James
  Molenda

  
	
   

  	
   

  	
      James
  Molenda   , as Payor

  
	
   

  	
   

  
	
   

  	
   

  
	
  ACCEPTED:

  	
   

  
	
   

  	
   

  
	
  Nexsan
  Corporation

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Martin Boddy

  	
   

  
	
  Name:

  	
  Martin Boddy

  	
   

  
	
  Title:

  	
  CEO

  	
   

  
						

 

4EXHIBIT 10.30

 

AGREEMENT

 

This Agreement (this “Agreement”) dated as of January 15,
2008, by and between James Molenda (“Molenda”) and NEXSAN CORPORATION
(the “Company”).

 

WHEREAS, Molenda purchased pursuant to that certain
Restricted Stock Purchase Agreement, dated as of January 4, 2001, as
amended (the “Stock Purchase Agreement”), 1,200,000 shares of common
stock of the Company at $0.66 per share (the “Shares” or the “Collateral”);

 

WHEREAS, the purchase price for the Shares was paid by
Molenda in the form of a promissory note, issued on January 4, 2001, as
amended, (the “Note”) in the principal amount of $792,000 with a stated
maturity date of January 4, 2006 and bearing interest at a rate of 5.61%
per annum;

 

WHEREAS, accrued and unpaid interest on the Note as of
the date hereof is $312,600.88.

 

WHEREAS, Molenda pursuant to that certain Pledge
Agreement, dated as of January 4, 2001 (the “Pledge Agreement”),
agreed to pledge all right, title and interest in the Shares as security for
payment and performance of the Note;

 

WHEREAS, Molenda and the Company signed Joint Escrow
Instructions, dated January 4, 2001, (the “Escrow Instructions”),
directing the Escrow Holder (as defined in the Stock Purchase Agreement) to
hold in its possession all of the documents delivered pursuant to the Stock
Purchase Agreement;

 

WHEREAS, none of the principal amount or the accrued
interest on the Note has been paid as of the date hereof (the “Obligations”);

 

WHEREAS, the Company, in contemplation of an initial
public offering of its common stock and in order to comply with certain
provisions set forth in The Sarbanes-Oxley Act of 2002 (“SOX”), has demanded
payment of the Obligations and, in order to satisfy the Obligations in full,
the parties have agreed that the Company will acquire the Collateral on the
terms and conditions hereinafter set forth, pursuant to the Stock Purchase
Agreement and Pledge Agreement; and

 

WHEREAS, it is the intent of the parties that the
transactions contemplated by this Agreement restore the parties to the position
they would be in but for the purchase of the Collateral by the Company in order
to comply with the requirements of SOX.

 

NOW, THEREFORE, in consideration of the mutual
agreements set forth in this Agreement, the parties hereto agree as follows:

 

1.             Amount
Due.  Molenda hereby acknowledges and
agrees that $1,104,600.88 represents all amounts payable under the Note as of
the date hereof and such amount is due and payable to the Company and that no
payments have been made as of the date hereof on account of the Obligations.

 

 

2.             Value
of Collateral.  The aggregate fair
market value of the Collateral as of the date of this Agreement is
$804,000.  The parties hereby acknowledge
and agree that the aggregate fair market value of the Collateral as of the date
of this Agreement is $300,600.88 less than the aggregate amount of the
Obligations and that such deficit will be forgiven by the Company.

 

3.             Satisfaction
of Obligations.  The parties hereby
agree that, in full and complete satisfaction of the Obligations, Molenda
hereby transfers all right, title and interest in and to all of the Collateral
to the Company pursuant to and as contemplated by the Pledge Agreement.  Molenda agrees to instruct the Escrow Holder to
deliver the certificates evidencing the Collateral and all other relevant
documents to the Company.

 

4.             Termination
of Agreements.  The parties hereby
acknowledge and agree that, upon compliance by Molenda with Section 3 of
this Agreement, the Stock Purchase Agreement, Note, Pledge Agreement and the
Escrow Instructions shall be terminated and shall be of no further force or
effect.

 

5.             Representations
and Warranties.  Molenda is the legal
record and beneficial owner of, and has good and marketable title to, the
Collateral, and such title is subject to no pledge, lien, mortgage,
hypothecation, security interest, charge, option, claim or other encumbrance
whatsoever, except the lien and security interest created by the Pledge
Agreement.

 

6.             Option
Grant.  In order to maintain an
equity interest in the Company comparable to that represented by the Shares,
the Company hereby grants to Molenda a new option (the “New Option”) for
the same number of shares acquired pursuant to the Stock Purchase Agreement,
for an exercise price and on the terms set forth in the Stock Option Agreement
substantially in the form of Exhibit A attached hereto (the “Stock
Option Agreement”).  By his signature
below, Molenda acknowledges and agrees to be bound by the terms and conditions
of this Agreement and the Stock Option Agreement and represents and warrants to
the Company that he has relied solely on his own legal and financial advisors
in evaluating the legal, financial, economic and tax implications to himself
personally of the transactions contemplated hereby.

 

7.             Miscellaneous.

 

(a)          Governing Law.  This Agreement shall be governed by and be
construed in accordance with the law of the State of New York, without regard
to conflicts of laws principles.

 

(b)          Invalidity.  In the event that any provision of this
Agreement is declared by a court of competent jurisdiction to be void or
unenforceable, the remainder of this Agreement shall not be affected thereby
and shall remain in full force and effect to the extent feasible in the absence
of the void and unenforceable provision.

 

(c)          Further Assurances.  The parties agree to execute and deliver such
amendments and supplements to this Agreement, and such other documents and
instruments, and take such further actions, as may be necessary in order
effectuate the intent and purposes of this Agreement.

 

2

 

(d)           Counterparts.  This Agreement may be executed in
counterparts, each of which when so executed shall be deemed an original, but
all of which when taken together shall constitute one and the same instrument.

 

This Agreement has been executed by the parties as of
the day and year first written above.

 

 

	
   

  	
  By:

  	
  /s/ James Molenda

  
	
   

  	
   

  	
  James Molenda

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  NEXSAN CORPORATION:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gene Spies

  
	
   

  	
   

  	
  Name:

  	
  GENE SPIES

  
	
   

  	
   

  	
  Title:

  	
  CFO

  
					

 

3

 

Exhibit A

(Stock Option Agreement)

 

 

NEXSAN
CORPORATION

 

STOCK
OPTION AGREEMENT

 

This Stock Option Agreement (the “Agreement”)
is made and entered into as of the date of grant set forth below (the “Date of Grant”) by and between
Nexsan Corporation, a Delaware corporation (the “Company”),
and James Molenda (the “Optionee”).

 

	
  Optionee:

  	
   

  	
  James Molenda

  
	
   

  	
   

  	
   

  
	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Total Option Shares:

  	
   

  	
  1,200,000 (the “Total Option Shares”)

  
	
   

  	
   

  	
   

  
	
  Exercise Price Per Share:

  	
   

  	
  $0.8687, increasing by
  3.23% per annum compounded annually on each March 31 from the Date of
  the Grant through the date of exercise

  
	
   

  	
   

  	
   

  
	
  Date of Grant:

  	
   

  	
  January 15, 2008
  (the “Date of Grant”)

  
	
   

  	
   

  	
   

  
	
  Expiration Date:

  	
   

  	
  March 31, 2013

  
	
   

  	
   

  	
   

  
	
  Type of Stock Option:

  	
   

  	
  Nonqualified Stock Option

  

 

1.             GRANT OF OPTION. 
The Company hereby grants to the Optionee an option (the “Option”) to purchase the total
number of shares of Common Stock of the Company set forth above as Total Option
Shares (the “Shares”) at the Exercise
Price Per Share set forth above (the “Exercise Price”),
subject to all of the terms and conditions of this Agreement.  This Option is not being issued under the
Company’s 2001 Stock Option Plan.

 

2.             EXERCISE PERIOD.

 

2.1         Exercise Period of Option.  This
Option is exercisable on the earlier of (i) January 1, 2009 or (ii) in
the event of the Sale of the Company, immediately prior to the date of the
consummation of such Sale; provided that, in each case under clauses (i) and
(ii) above, the Repurchase has been consummated in accordance with the
terms of the Repurchase Agreement and there has been no breach by Optionee
under such agreement.  “Sale” means any of the
following:  (i) any transaction or
series of related transactions, including, without limitation, any merger or
consolidation of the Company with or into another corporation or person or
entity (other than with or into a wholly-owned subsidiary), or the sale of
capital stock of the Company by the holders thereof, in any case under
circumstances in which the holders of the outstanding capital stock of the
Company immediately prior to such transaction or series of related transactions
shall own less than a majority in voting power of the outstanding capital stock
of the Company or the surviving or resulting corporation or other entity, as
the case may be, immediately following such transaction or (ii) the sale
or transfer of all or substantially all of the assets of the Company.  “Repurchase”
means the repurchase of 1,000,000 shares of 

 

 

Common Stock held by the
Optionee by the Company pursuant to the terms of that certain Repurchase
Agreement.  “Repurchase
Agreement” means that certain agreement dated as of the date as
of the date hereof between the Optionee and the Company.

 

2.2         Expiration. 
The Option shall expire on the Expiration Date set forth above.

 

3.             MANNER OF EXERCISE.

 

3.1         Stock Option Exercise Agreement. 
To exercise this Option, Optionee (or in the case of exercise after
Optionee’s death or incapacity, Optionee’s executor, administrator, heir or
legatee, as the case may be) must deliver to the Company an executed stock
option exercise agreement in a form as required by the Company (the “Exercise Agreement”), which shall
set forth, inter alia, (i) Optionee’s election to exercise the Option for
the full number of Shares, (ii) any restrictions imposed on the Shares and
(iii) any representations, warranties and agreements regarding Optionee’s
investment intent and access to information as may be required by the Company
to comply with applicable securities laws. 
If someone other than Optionee exercises the Option, then such person
must submit documentation reasonably acceptable to the Company verifying that
such person has the legal right to exercise the Option and such person shall be
subject to all of the restrictions contained herein as if such person were the
Optionee.  The date of exercise of the
Option shall be the date on which written notice of exercise is hand delivered
to the Company, during normal business hours or, if sent electronically, the
date on which it is actually transmitted, during normal business hours, or if
mailed, the date on which it is postmarked, provided such notice is actually
received.

 

3.2         Limitations on Exercise. 
The Option may not be exercised unless such exercise is in compliance
with all applicable federal and state securities laws, as they are in effect on
the date of exercise.  The Option may not
be exercised for less than the Total Option Shares.

 

3.3         Payment. 
The Exercise Agreement shall be accompanied by full payment of the
Exercise Price for the shares being purchased in cash (by check), or where
permitted by law:

 

(a)          if the Company so allows, in its sole
discretion, by surrender of shares of the Company’s Common Stock that (i) either
(A) have been owned by Optionee for more than six (6) months and have
been paid for within the meaning of SEC Rule 144 (and, if such shares were
purchased from the Company by use of a promissory note, such note has been
fully paid with respect to such shares); or (B) were obtained by Optionee
in the open public market; and (ii) are clear of all liens, claims,
encumbrances or security interests;

 

(b)          if the Company so allows, in its sole
discretion, and provided that a public market for the Company’s stock exists: (i) through
a “same day sale” commitment from Optionee and a broker-dealer that is a member
of the National Association of Securities Dealers (an “NASD
Dealer”) whereby Optionee irrevocably elects to exercise the
Option and to sell a portion of the Shares so purchased sufficient to pay for
the total Exercise Price and whereby the NASD Dealer irrevocably commits upon
receipt of such Shares to forward the total Exercise Price directly to the
Company, or (ii) through a “margin” commitment from Optionee and an 

 

2

 

NASD Dealer whereby
Optionee irrevocably elects to exercise the Option and to pledge the Shares so
purchased to the NASD Dealer in a margin account as security for a loan from
the NASD Dealer in the amount of the total Exercise Price, and whereby the NASD
Dealer irrevocably commits upon receipt of such Shares to forward the total
Exercise Price directly to the Company; or

 

(c)          in cash; or by check;

 

(d)          by any combination of the foregoing.

 

3.4         Tax Withholding. 
Prior to the issuance of the Shares upon exercise of the Option,
Optionee must pay or provide for any applicable federal, state and local
withholding obligations of the Company. 
If the Company permits, Optionee may provide for payment of withholding
taxes upon exercise of the Option by requesting that the Company retain the
minimum number of Shares with a fair market value, as determined in good faith
by the Board of Directors of the Company, equal to the minimum amount of taxes
required to be withheld; but in no event will the Company withhold Shares if
such withholding would result in adverse accounting consequences to the
Company.  In such case, the Company shall
issue the net number of Shares to the Optionee by deducting the Shares retained
from the Shares issuable upon exercise.

 

3.5         Issuance of Shares. 
Provided that the Exercise Agreement and payment are in form and
substance satisfactory to the Company, the Company shall issue the Shares
registered in the name of Optionee, Optionee’s authorized assignee, or Optionee’s
legal representative, and shall deliver certificates representing the Shares
with the appropriate legends affixed thereto.

 

4.             COMPLIANCE WITH LAWS AND
REGULATIONS.  The exercise of the Option and the issuance
and transfer of Shares shall be subject to compliance by the Company and Optionee
with all applicable requirements of federal and state securities laws and with
all applicable requirements of any stock exchange on which the Company’s Common
Stock may be listed at the time of such issuance or transfer.

 

5.             NONTRANSFERABILITY OF OPTION. 
The Option may not be transferred in any manner other than by will or by
the laws of descent and distribution and by instrument to an inter vivos or
testamentary trust in which the options are to be passed to beneficiaries upon
the death of the trustor (settlor), or by gift to “immediate family” as that
term is defined in 17 C.F.R. 240.16a-l(e), and may be exercised during the
lifetime of Optionee only by Optionee or in the event of Optionee’s incapacity,
by Optionee’s legal representative.  The
terms of this Agreement shall be binding upon the executors, administrators,
successors and assigns of Optionee.

 

6.             COMPANY’S RIGHT OF FIRST REFUSAL.

 

6.1         Right of First Refusal. 
Before the Shares acquired upon exercise of this Option held by Optionee
or any transferee (either being referred to herein as the “Holder”)
may be sold or otherwise transferred (including transfer by gift or operation
of law), the Company or 

 

3

 

its assignee(s) shall
have a right of first refusal to purchase the Shares on the terms and
conditions set forth in this Section (the “Right
of First Refusal”).

 

6.2          Notice of Proposed Transfer. 
The Holder of the Shares shall deliver to the Company a written notice
(the “Notice”) stating: (i) the
Holder’s bona fide intention to sell or otherwise transfer such Shares; (ii) the
name of each proposed purchaser or other transferee (“Proposed
Transferee”); (iii) the number of Shares to be transferred
to each Proposed Transferee; and (iv) the bona fide cash price or other
consideration for which the Holder proposes to transfer the Shares (the “Offered Price”), and the Holder
shall offer the Shares at the Offered Price to the Company or its assignee(s).

 

6.3          Exercise of Right of First Refusal. 
At any time within thirty (30) days after receipt of the Notice, the
Company and/or its assignee(s) may, by giving written notice to the
Holder, elect to purchase all or part of the Shares proposed to be transferred
to any one or more of the Proposed Transferees, at the Offered Price (“Purchase Price”).  If the Offered Price includes consideration
other than cash, the cash equivalent value of the non-cash consideration shall
be determined by the Board of Directors of the Company in good faith.

 

6.4          Payment. 
Payment of the Purchase Price shall be made, at the option of the
Company or its assignee(s), by cash or check.

 

6.5          Holder’s Right to Transfer. 
If Shares proposed in the Notice to be transferred to a given Proposed
Transferee are not purchased by the Company and/or its assignee(s) as
provided in this Section, then the Holder may sell or otherwise transfer such
Shares to that Proposed Transferee at the Offered Price or at a higher price,
provided that such sale or other transfer is consummated within one hundred
twenty (120) days after the date of the Notice and provided further that any
such sale or other transfer is effected in accordance with any applicable
securities laws and the Proposed Transferee agrees in writing that the
obligations in this Agreement shall continue to apply to the Shares.  If the Shares described in the Notice are not
transferred to the Proposed Transferee within such period, a new Notice shall
be given to the Company, and the Company and/or its assignees shall again be
offered the Right of First Refusal before any Shares held by the Holder may be
sold or otherwise transferred.

 

6.6          Exception for Certain Family
Transfers.  Notwithstanding anything to the contrary
contained in this Section, the transfer of any or all of the Shares during the
Purchaser’s lifetime or on the Purchaser’s death by will or intestacy to the
Purchaser’s Immediate Family or a trust for the benefit of one or more members
of the Purchaser’s Immediate Family or to a trust, partnership, limited
liability company, custodianship or other fiduciary account for the benefit of
the Purchaser or one or more members of the Purchaser’s Immediate Family, or
the disbursement therefrom to Purchaser or one or more members of his Immediate
Family, shall be exempt from the provisions of this Section, provided that the
Purchaser notifies the Company in writing within thirty (30) days of said
transfer.  “Immediate
Family” as used herein shall mean spouse, lineal descendant or
antecedent, father, mother, brother or sister. 
In such case, the transferee or other recipient shall receive and hold
the Shares so transferred subject to the provisions of this Agreement and there
shall be no further transfer of such Shares except in accordance with the terms
of this Section.

 

4

 

6.7          Termination of Right of First Refusal. 
The Right of First Refusal shall terminate as to any Shares upon the
date of the first sale of Common Stock of the Company to the general public
pursuant to a registration statement filed with and declared effective by the
Securities and Exchange Commission under the Securities Act of 1933, as amended
(the “Securities Act”).

 

7.             INVESTMENT REPRESENTATIONS.

 

The Optionee hereby represents and warrants to and
agrees with the Company as follows:

 

7.1          Acquisition of Shares for Own Account. 
The Optionee will acquire the Shares, if at all, pursuant to this
Agreement with the Optionee’s own funds. 
The Shares will be acquired, if at all, for the Optionee’s own account,
not as a nominee or agent for any other person or firm.  No one else has or will have on any exercise
of the Option or any portion thereof any interest, beneficial or otherwise, in
any of the Shares to be acquired on such exercise.  The Optionee is not, and prior to any exercise
of the Option will not be, obligated to transfer any of the Shares or any
interest therein to anyone else and the Optionee does not and will not have any
agreement or understandings to do so.

 

7.2          Shares May Be “Restricted Securities” and
Certificates Legended.  The Optionee understands and
agrees that:

 

7.2.1        The Shares, if and when issued, may be “restricted
securities,” as that term is defined in Rule 144 under the Securities Act
and, accordingly, the Optionee may be required to hold the Shares indefinitely
unless they are registered under the Securities Act or an exemption from such
registration is available;

 

7.2.2        The Company is as of the date hereof not under any
obligation to register the Shares under the Securities Act, with any state
securities commission or with any stock exchange or to comply with any
exemptions thereunder; and

 

7.2.3        The Company shall cause legends set forth below or
legends substantially equivalent thereto, to be placed upon any certificates
representing any Shares received by the Optionee on exercise of the Option,
which legend restricts the sale, transfer or disposition of the Shares
otherwise than in accordance with this Agreement, as well as any other legends
as the Company may deem appropriate or that may be required by the Company or
by the applicable state or federal securities laws or such other agreements to
which the Optionee is a party:

 

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), AND MAY NOT BE OFFERED,
SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL
REGISTERED UNDER THE ACT OR, IN THE OPINION OF COUNSEL SATISFACTORY TO THE
ISSUER OF THESE SECURITIES, THAT SUCH REGISTRATION IS NOT REQUIRED UNDER SAID
ACT OR SUCH TRANSACTION COMPLIES WITH RULES PROMULGATED BY THE SECURITIES AND
EXCHANGE COMMISSION UNDER SAID ACT.

 

5

 

IN ADDITION, SALE, TRANSFER, ENCUMBRANCE, HYPOTHECATION, GIFT OR OTHER
DISPOSITION OR ALIENATION OF SUCH SHARES OR ANY INTEREST THEREIN IS RESTRICTED
BY AND SUBJECT TO A STOCK OPTION AGREEMENT A COPY OF WHICH MAY BE
INSPECTED AT THE PRINCIPAL OFFICE OF THE ISSUER AND ALL OF THE PROVISIONS OF
WHICH ARE INCORPORATED BY REFERENCE IN THIS CERTIFICATE.

 

7.3          Agreement to Refrain from Resales. 
The Optionee agrees that, notwithstanding any provision hereof to the
contrary, the Optionee shall in no event make any disposition of all or any
part of or interest in the Shares and that such Shares shall not be encumbered,
pledged, hypothecated, sold or transferred by the Optionee nor shall the
Optionee receive any consideration for such Shares or for any interest therein
from any person, unless and until prior to any proposed transfer, encumbrance,
disposition, pledge, hypothecation or sale of any Shares, either (1) a
registration statement on form S-1 or S-8 (or any other form replacing such
form or appropriate for the purpose under the Securities Act) with respect to
such shares proposed to be transferred or otherwise disposed of shall be then
effective or (2) (i) the Optionee shall have notified the Company of
the proposed disposition and shall have furnished the Company with a detailed
statement of the circumstances surrounding the proposed disposition, (ii) the
Optionee shall have furnished the Company with an opinion of counsel in form
and substance satisfactory to the Company to the effect that such disposition
will not require registration of any such Shares under the Securities Act or
qualification of any such shares under any other securities law, (iii) such
opinion of counsel shall have been concurred in by counsel for the Company and (iv) the
Company shall have advised the Optionee of such concurrence.

 

8.             LOCK-UP PERIOD. 
Optionee hereby agrees that, if so requested by the Company or any
representative of the underwriters (the “Managing Underwriter”)
in connection with any registration of the offering of any securities of the
Company under the Securities Act, Optionee (or any transferee) shall not sell
or otherwise transfer any Shares or other securities of the Company during the
180-day period (or such shorter period as may be requested in writing by the
Managing Underwriter and agreed to in writing by the Company) (the “Market Standoff Period’) following
the effective date of a registration statement of the Company filed under the
Securities Act.  Such restriction shall
apply only to the first registration statement of the Company to become
effective under the Securities Act that includes securities to be sold on behalf
of the Company to the public in an underwritten public offering under the
Securities Act.

 

The Company may impose stop-transfer instructions with
respect to securities subject to the foregoing restrictions until the end of
such Market Standoff Period.

 

9.             ADJUSTMENTS UPON CHANGES
IN CAPITALIZATION; DISSOLUTION AND LIQUIDATION.

 

9.1          Changes in Capitalization. 
Subject to any required action by the stockholders of the Company, the
number of shares of Common Stock covered by the Option, as well as the price
per share of Common Stock covered by the Option, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the 

 

6

 

Common Stock.  Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and
conclusive.  Except as expressly provided
herein, no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number or price
of Shares subject to the Option.

 

9.2          Dissolution or Liquidation. 
In the event of the proposed dissolution or liquidation of the Company,
the Company shall notify the Optionee as soon as practicable prior to the
effective date of such proposed transaction. 
The Company in its discretion may provide for an Optionee to have the
right to exercise his Option until fifteen (15) days prior to such transaction
as to all of the Shares covered thereby, including Shares as to which the
Option would not otherwise be exercisable. 
In addition, the Company may provide that its repurchase option
applicable to any Shares purchased upon exercise of an Option shall lapse as to
all such Shares, provided the proposed dissolution or liquidation takes place
at the time and in the manner contemplated. 
To the extent it has not been previously exercised, the Option will
terminate immediately prior to the consummation of such proposed action.

 

10.          PRIVILEGES OF STOCK OWNERSHIP. 
Optionee shall not have any of the rights of a shareholder with respect
to any Shares until the Shares are issued to Optionee.

 

11.          ENTIRE AGREEMENT AND SEVERABILITY. 
This Agreement, together with the Repurchase Agreement, constitute the
entire agreement of the parties and supersede all prior undertakings and
agreements with respect to the subject matter hereof.  If any provision of this Agreement shall
hereafter be held to be invalid, unenforceable or illegal in whole or in part
for any reason, (i) such provision shall be reformed to the minimum extent
necessary to cause such provision to be valid, enforceable and legal while
preserving the intent of the parties or (ii) if such provision cannot be
so reformed, such provision shall be severed from this Agreement and an
equitable adjustment shall be made to this Agreement so as to give effect to
the intent of the parties.  Neither such
reformation nor severance shall affect or impair the legality, validity or
enforceability of any other provision of this Agreement.

 

12.          NOTICES.  Any notice
required to be given or delivered to the Company under the terms of this
Agreement shall be in writing and addressed to the CEO of the Company at its
principal corporate offices.  Any notice
required to be given or delivered to Optionee shall be in writing and addressed
to Optionee at the address indicated herein or to such other address as such
party may designate in writing from time to time to the Company.  All notices shall be deemed to have been
given or delivered upon: (i) personal delivery; (ii) three (3) days
after deposit in the United States mail by certified or registered mail (return
receipt requested); (iii) one (1) business day after deposit with any express
courier (prepaid); or (iv) one (1) business day after transmission by
facsimile, rapifax or telecopier.

 

13.          SUCCESSORS AND ASSIGNS. 
The Company may assign any of its rights under this Agreement including
its Right of First Refusal.  This
Agreement shall be binding upon and inure to the benefit of the successors and
assigns of the Company.  Subject to the
restrictions on transfer set forth herein, this Agreement shall be binding upon
Optionee and Optionee’s heirs, executors, administrators, legal
representatives, successors and assigns.

 

7

 

14.          GOVERNING LAW.  This
Agreement shall be governed by and construed in accordance with the laws of the
State of New York as such laws are applied to agreements to be performed
entirely within New York.

 

15.          ACCEPTANCE.  Optionee has
read and understands the terms and provisions of this Agreement, and accepts
the Option subject to all the terms and conditions of this Agreement.

 

16.          TAX ADVICE.  The Optionee
hereby acknowledges and agrees that the Company has made no warranties or
representations to Optionee with respect to the tax consequences of the
transactions contemplated by this Agreement and Optionee is in no manner
relying on the Company or its representatives for an assessment of such tax
consequences.

 

8

 

IN WITNESS WHEREOF, the Company has caused this Stock
Option Agreement to be executed by its duly authorized representative and
Optionee has executed this Stock Option Agreement, effective as of the Date of
Grant.

 

	
  NEXSAN CORPORATION

  	
  OPTIONEE

  
	
   

  	
   

  
	
  By:

  	
  /s/ Gene Spies

  	
   

  	
  /s/ James Molenda

  
	
   

  	
  Signature

  
	
   

  	
   

  
	
   

  	
  GENE SPIES

  	
   

  	
  James Molenda

  
	
  (Please print name)

  	
  (Please print name)

  
	
   

  	
   

  
	
   

  	
  CFO

  	
   

  	
   

  
	
  (Please print title)

  	
   

  
					

 

9

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