Document:

EXHIBIT 10.7

 

 

Employment
Agreement among

Nexsan Corporation, Nexsan Technologies Incorporated and Jim Molenda

 

 

This
EMPLOYMENT AGREEMENT (the “Agreement”) is effective as of January 4, 2007
(the “Agreement Date”) between and among Nexsan Corporation (“Holdings”),
Nexsan Technologies Incorporated (the “Company”) and Jim Molenda (“Executive”).  This Agreement is intended to supersede all
earlier employment agreements including the original Employment Agreement of January 4th,
2001.

 

The
Company, Holdings and Executive intend to be bound by this Agreement, which
shall constitute the full and complete binding agreement between, and among
Holdings, the Company and Executive.

 

WHEREAS,
the Company and Holdings desire to continue to employ Executive to serve as Vice
President, upon the terms and subject to the conditions set forth herein;

 

NOW,
THEREFORE, in consideration of the mutual agreements contained herein, the
Company, Holdings and Executive hereby agree as follows:

 

I.                                         TERM
OF AGREEMENT

 

A.                                   The term of the Agreement begins as of
the Agreement Date and continues until the fourth anniversary of the
Commencement Date (the “Term”).  Nothing
herein is meant to change the “at will” nature of Executive’s relationship with
the Company and/or Holdings, which shall be “at will.”

 

II.                                     POSITIONS
AND DUTIES

 

A.                                   During the Term, Executive will serve as
Executive Vice President of Sales for the Company and Holdings or any of its
subsidiaries as determined by the President and Chief Executive Officer of
Holdings and the Company (“CEO”)

 

B.                                     Executive will report to the CEO, or to
whomever the CEO designates

 

C.                                     Executive is to devote his full business
time to the Company and Holdings in fulfilling his responsibilities for the
functions and operations of the Company as assigned to him by the CEO.  The Executive shall not engage in any other
business activity during the duration of this Agreement, unless written
approval is first obtained from the CEO.

 

III.                                 BASE
SALARY

 

A.                                   Annual base salary is $138,600.00 payable
periodically according to the Company’s normal payroll policies.

 

 

 

IV.                                BONUS

 

A.                                   Executive will earn a sales related bonus
based on a formula decided by the CEO, defined in separate Nexsan internal
documentation such as a commissions pool spread-sheet or other similar
document, which may change on a quarterly basis.  This bonus is currently paid monthly and
consists of a percentage of the sales commission pool.

 

V.                                    EQUITY
INCENTIVE GRANTS

 

Executive has already received equity compensation.  No further equity compensation is part of
this Agreement.  However, it is
understood that, as part of this Agreement, Molenda’s stock shall be handled as
follows:

 

(a)                                  Molenda and Nexsan Corporation (the “Parent”)
are parties to a Restricted Stock Purchase Agreement, dated January 4,
2001, as amended by Amendment No. 1 dated as of April 1, 2003
(collectively, the “Stock Purchase Agreement”), pursuant to which Molenda
purchased 1,200,000 shares of Common Stock of the Parent (“Common Stock”) at a
price of $0.66 per share, which price was paid by issuance of a promissory note
(the “Note”) in the original principal amount of $792,000 and bearing interest
at 5.61% per annum.  The principal amount
and accrued and unpaid interest on the Note were due and payable on January 4,
2006 (the “Original Maturity Date”).  No
portion of principal or interest has been paid to date.  The Note is secured by a pledge of the
restricted stock purchased by Molenda and is non-recourse as to Molenda personally
except to the extent of accrued and unpaid interest and 33-1/3% of the original
principal amount of the Note.  As of the
Original Maturity Date, accrued interest was approximately $222,000 and
interest continues to accrue on the unpaid principal balance of the Note at the
rate of 5.61% per annum.

 

(b)                                 Pursuant to the Stock Purchase Agreement,
Molenda’s restricted stock was subject to a repurchase option by the Parent
exercisable when the employment or engagement of the stockholder
terminates.  Such repurchase option
terminated (i.e., Molenda’s restricted stock vested) as follows: 20% of such
shares vested on 12/31/02 and 10% of such shares vested on each of December 31,
2003, 2004 and 2005.  Therefore, as of December 31,
2005, 600,000 of Molenda’s restricted stock became fully vested.  The remaining 600,000 restricted shares would
vest only on the achievement of certain specified sales targets and, as of the
date hereof, 450,000 additional shares have vested but the remaining 150,000 of
Molenda’s shares continue to be subject to the repurchase option.

 

(c)                                  As of April 1, 2003, the Parent and
Molenda entered into the following transactions:

 

2

 

A.                                   The Parent granted to Molenda ten-year
options (“Options”) at $.28 per share for 1,500,000 shares of Common Stock,
which Options expressly state that they are subject to the Call Options
described below.

 

B.                                     Molenda granted the Parent ten-year call
options (“Calls”) for 1,500,000 shares of Common Stock at an exercise price per
share of $.66 plus an amount equal to accrued interest on $.38 from January 4,
2001 through April 1, 2003, which exercise price continued to increase
after April 1, 2003 at the rate of 5.61% x .38/.66 = 3.23%.  Accordingly, if the Call is exercised,
Molenda will receive (among other amounts) an amount equal to interest on the
Note in excess of interest on $.28.  The
parties acknowledge and agree that (i) Molenda has no obligation to
exercise the Options, (ii) the Parent has no obligation to exercise the
Call Option, and (iii) Molenda’s rights and obligations under the Stock
Purchase Agreement and the Note remain in full force and effect in accordance
with their terms not-withstanding the Options and the Call Option.

 

(d)                                 In consideration of the undertakings of
Molenda under this revised Employment Agreement, the Parent agrees to extend
the maturity date of the Note until the earlier of (i) sale of the Parent
and (ii) April 1, 2013 (the expiration date of the Options and Call
Option).  Interest on the unpaid
principal amount of the Note will continue to accrue at 5.61% per annum.  In addition to the foregoing, the Parent
agrees to notify Molenda in the event the Board of Directors of the Parent
determines in good faith that the value of the Common Stock equals or exceeds
$.66 per share.  Within 15 days after
receipt of any such notice, provided that Molenda has complied in all respects
with the terms of this Agreement Molenda will have the right to require the
Parent to repurchase the shares of Common Stock that were purchased by him
pursuant to the Stock Purchase Agreement at a purchase price equal to the
outstanding balance of the Note (including principal and interest), which
purchase prince shall be payable by cancellation of the Note.  Notwithstanding such repurchase, Molenda will
retain the Options, subject to the Calls, which shall remain in full force and
effect in accordance with their terms. 
Contemporaneously with such repurchase, the Parent agrees to grant
additional options to Molenda for a number of shares of Common Stock equal to
the number of shares so repurchased, at an exercise price of $.66 per share,
which options shall remain exercisable until the expiration date of the Options
and Call Option.

 

(e)                                  Molenda agrees to execute and deliver
such other or further agreements, including but not limited to, amendments to
the Stock Purchase Agreement and the Note, as may be requested by the Parent in
order to implement the parties’ understandings with respect to the Common Stock
purchased by Molenda pursuant to the Stock Purchase Agreement as hereinabove
set forth.

 

3

 

VI.                                BENEFITS
AND PERQUISITES

 

A.                                   Participation in benefit (retirement,
welfare and other fringe benefit) plans and pro-grams, and perquisites on same
terms and conditions as provided to other similarly-situated senior executives
of Holdings and the Company.

 

B.                                     Prompt reimbursement of business expenses
in accordance with Holdings and the Company’s reimbursement policies.

 

C.                                     Vacation: four weeks per year per normal
Holdings and Company policy of accrual and limitations

 

VII.                            SEVERANCE
BENEFITS

 

A.                                   If Executive has a termination of
employment during the Term that is by Holdings and the Company without Cause,
or by Executive for Good Reason, Executive shall be entitled to the following
benefits (in addition to payment of any earned but unpaid base salary and
bonus) as follows:

 

Executive shall be entitled to receive (a) 12 months of base
salary continuation, to be paid over a 12 month period in according to the
Company’s normal payroll policies regarding base salary; plus (b) a cash
bonus on a monthly basis for 12 months that equals the average monthly bonus
received during the prior twelve months, also to be paid over a 12 month
period.

 

VIII.                        TERMINATION
FOR CAUSE, BY EXECUTIVE FOR ANY REASON, DUE TO EXECUTIVE’S DISABILITY OR DEATH
OR DUE TO THE EXPIRATION OF THE TERM

 

If Executive has a termination of employment during the Term that is: (i) by
Holdings and/or Company for “Cause;” (ii) voluntarily by Executive; (iii) due
to Executive’s disability, or; (iv) due to Executive’s Death, Executive
shall be entitled to the following:

 

A.                                   Immediately after Executive’s termination
of employment, Holdings and the Company (or any successor) shall remit to
Executive any earned but unpaid annual base salary or bonus.

 

B.                                     The respective provisions of any employee
benefit plan or perquisite program in which Executive participates shall
control.

 

IX.                                RESTRICTIVE
COVENANTS

 

A.                                   Non-Competition:  For a one-year period following Executive’s
termination of employment with Holdings and the Company, Executive shall not
encourage, solicit, or attempt to induce (or assist others to encourage,
solicit or attempt to induce) any customer of the Company, including but not
limited to Value Added Resellers, OEM customers and end-users of the Company’s
products, to reduce, restrict, or terminate its business relationship with the
Company or to shift its business from the Company to any other supplier of
competing goods or services.

 

4

 

B.                                     Non-Solicitation:  For a one-year period following Executive’s
termination of employment with Holdings and the Company, Executive shall be
prohibited from soliciting individuals or entities that are employees,
customers or vendors of Holdings or the Company at the time of Executive’s
termination of employment to sever, diminish, replace or alter their
relationship with Holdings or the Company, or in a manner that otherwise is
adverse to Holdings’ or the Company’s interests.

 

C.                                     Confidentiality:  Executive
shall be prohibited from disclosing or otherwise making public any proprietary,
confidential or secret knowledge, data or other matters used in, associated
with or related to Holdings, the Company or any of their affiliates, including
but not limited to, the current or anticipated business and the research,
development and marketing activities of Holdings, the Company and any of their
affiliates, as well as such information of a party granting rights to Holdings,
the Company or any of their affiliates.

 

D.                                    Original Material: Executive agrees that any Intellectual
Property shall be the property of and belong exclusively to Holdings and the
Company, and that Executive will not make (unless required as part of his
duties to Holdings or the Company) or permit anyone else to read or make any
copy, abstract or summary of any document belonging to Holdings, the Company or
any of its affiliates.  Further,
Executive shall cooperate with Holdings and the Company in disclosing and
providing other reasonable information relating to Intellectual Property and,
following Executive’s termination of employment, Executive shall not use,
duplicate, reveal or take with Executive any Intellectual Property or other
materials of Holdings, the Company or any of their affiliates.  In addition, Executive shall assign to
Holdings and the Company all Intellectual Property and any rights thereto, and
Executive shall take all reasonably necessary steps to allow Holdings and/or
the Company to perfect the ownership of such Intellectual Property.  The Holdings and Company understand that
Molenda, in his own time, occasionally participates in non-profit activities
outside the storage industry.  Any intellectual
property related to such activities is not intended to be the property of
Holdings and the Company, as defined above.

 

E.                                      Enforcement:  Executive acknowledges that his receipt of any
severance benefits pursuant to Section VII of this Agreement is
conditioned upon his honoring the above-listed restrictive covenants.  Executive further acknowledges that the
above-listed restrictive covenants shall also apply for the benefit of any
successor of Holdings and/or the Company for which Executive is employed at the
time of this termination of employment and, as such, may also be enforced as
described below by any such successor. 
If Executive should violate the restrictive covenants listed above,
Executive shall immediately (1) forfeit any unpaid severance payments or
benefits and any rights to receive Restricted Stock or

 

5

 

Bonus Shares and (2) shall
repay any such amounts or value previously received.  If Holdings and/or the Company has to bring
legal action to enforce these provisions and prevails, Executive shall
reimburse Holdings and/or the Company (as applicable) for all legal fees and
expenses incurred in connection with such action.

 

X.                                    MISCELLANEOUS

 

A.                                   Mitigation/Offset Required:  Executive shall be required to seek other
employment and to take any other action to mitigate severance payments by
Holdings and the Company (or any successor) under Section VII.  In addition, if Executive commences other
employment or self-employment while receiving severance benefits under Section VII,
his cash severance benefits shall be offset by any amounts earned through such
other employment during the severance period and any duplicative welfare
benefits shall also be subject to offset.

 

B.                                     Indemnification:  Holdings
and the Company to indemnify Executive to the fullest extent permitted by their
by-laws and applicable law.

 

C.                                     D&O Coverage:  Holdings
and the Company to provide directors’ and officers’ insurance coverage during
employment not less than the level maintained for the other executive officers
of Holdings and the Company and of the type and amount appropriate for a
company similar to Holdings and the Company.

 

D.                                    Other Agreements:  By
execution of this Agreement, Executive hereby warrants that this Agreement
supersedes the original employment agreement of Jan 4, 2001.  Such execution does not violate any other
valid or binding contracts to which Executive is a party or any other
obligations of Executive.

 

XI.                                KEY
DEFINITIONS

 

“Cause” means (1) an
unauthorized use or disclosure of Holdings and the Company’s confidential
information or trade secrets, which use or disclosure causes material harm to
Holdings and the Company, (2) a material breach of any agreement between
Executive and Holdings and the Company, (3) a material failure to comply
with Holdings and the Company’s written policies or rules of which
Executive had notice, (4) commission of a felony under the laws of the
United States or any state thereof or a misdemeanor involving moral turpitude, (5) a
failure to perform assigned duties after receiving written notification of such
failure from the Boards, provided that such assigned duties were commensurate
with his position and were reasonable in nature, (6) irresponsible,
unauthorized acts or any willful misconduct, gross negligence or willful
failure to act which has, or can reasonably be expected to have, a material
adverse effect on the business, financial condition or performance, reputation
or prospects of Holdings and the Company, or (7) any other errors, acts or
omissions which constitute cause under applicable state law.

 

6

 

“Good Reason” means the
occurrence of any one of the following events:

 

·                  a failure to
maintain Executive as the Executive Vice President of Holdings and the Company
or any successor or subsidiary of Holdings and the Company;

 

·                  a required move
of more than 25 miles in addition to Executive’s current commute to the current
office location in Woodland Hills, California; or

 

·                  a failure to
provide base salary and bonus in accordance with Sections III and IV
respectively, or a failure to provide benefits and perquisites in accordance
with Section VI;

 

provided,
that Executive shall give Holdings and the Company or their successor written
notice of such event claimed to constitute Good Reason and such event shall not
constitute Good Reason if cured by Holdings and/or the Company (as applicable)
or their successor within thirty (30) days of Holdings’ and the Company’s or
their successor’s receipt of such notice.

 

“Intellectual Property” means any
information, inventions, innovations, discoveries, improvements, ideas,
developments, methods, designs, reports, charts, drawings, analyses, reports,
concepts, original works of authorship or similar information relating to the
business of Holdings, the Company or any of their affiliates, including
methods, technology, customer lists, reports. 
Records brochures, instructions, manuals, computer apparatus, programs
and manufacturing techniques, whether or not protectable by patent or
copyright, that have been originated, developed, made, conceived, authored or
reduced to practice by Executive alone or jointly with others during Executive’s
employment with Holdings and the Company or their respective successors or
assigns.

 

IN
WITNESS WHEREOF, the parties have executed this Agreement to be effective as of
the Agreement Date.

 

	
  EXECUTIVE:

  	
   

  	
  NEXSAN
  TECHNOLOGIES, INC.

  
	
   

  	
   

  	
   

  
	
  /s/
  Jim Molenda

  	
   

  	
  /s/
  Philip Black

  
	
  Jim Molenda

  	
   

  	
  By:

  	
  Philip
  Black

  
	
   

  	
   

  	
  Title:

  	
  CEO

  
	
  1/4/2007

  	
   

  	
  Date:

  	
  1/4/2007

  
	
  Date

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  NEXSAN
  CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/
  Philip Black

  
	
   

  	
   

  	
  By:

  	
  Philip
  Black

  
	
   

  	
   

  	
  Title:

  	
  CEO

  
	
   

  	
   

  	
  Date:

  	
  1/4/2007

  

 

7EXHIBIT 10.8

 

Revised
Employment Agreement between

Nexsan Technologies, Inc. and Rik Mussman

 

November 21, 2007

 

Dear Rik,

 

This agreement (the “Agreement”) replaces and supersedes the
employment agreement you and Nexsan Technologies, Inc. (the “Company”) signed on October 12,
2006.  This Agreement sets forth the
terms and conditions of your employment by the Company and your
compensation.  We encourage you to keep a
copy for your own records, as it reflects your new employment status with the
Company.

 

We agree that:

 

On and after execution of this Agreement, you
will continue in your employment with the Company as its Chief Operating
Officer (COO) pursuant to the terms and conditions set forth herein.  You report to the CEO.  The scope of your job as COO includes
responsibility for Manufacturing Operations (both Derby and San Diego), RMA
departments, and Professional Services and Customer Support departments
worldwide.  There will be ‘dotted line’
reporting from some of your direct reports to others, such as the US Operations
Manager and UK Operations Manager liasing with the CFO, and certain European
support staff liasing with their country or regional managers by example.  You will have measurable targets/goals in line
with our financial projections as a prime means of assessing your
performance.  Your responsibilities may
be changed by the CEO unilaterally from time to time.  The terms of your employment and the benefits
currently provided by the Company are as follows:

 

1.             Current Salary.  Your salary will be
$225,000.00 per year effective next pay period, which starts on October 22,
2006.  You also are
eligible for quarterly bonuses up to $12,500 per quarter based on meeting key
parameters such as revenue and margins taken from the official financial projections
of record, the exact percentage split and parameters to be determined by the
CEO and notified to you.  You must be
employed on the last of the calendar quarter to receive a bonus payment for
that quarter.  Your bonus for a calendar
quarter will be paid within a reasonable period (not to exceed 45 days)
beginning 45 days after the last day of the calendar quarter.  Your salary and bonus may be subject to
review from time to time at the Company’s discretion.

 

2.             Other Compensation.  In
addition to your salary and bonus, you will receive a Change of Control Bonus
that is described in full in Appendix 1 at the end of this document or IPO
Bonus Shares as described in full in Appendix 2.  The Change of Control Bonus and IPO Bonus
Shares are in addition to any outstanding options previously granted to you.

 

3.             Benefits.  You will continue to
participate in regular health insurance, bonus and other employee benefit plans
established by the Company for its employees from time to time.

 

 

Except as provided below, the Company
reserves the right to change or otherwise modify, in its sole discretion, the
preceding terms of employment, as well as any of the terms set forth herein at
any time in the future.

 

4.             Confidentiality.  As an employee of the
Company, you have access to certain confidential information of the Company and
you may, during the course of your employment, develop certain information or
inventions that will be the property of the Company.  To protect the interests of the Company, you
will need to sign the Company’s standard “Employee Invention Assignment and
Confidentiality Agreement.”  During the
period that you render services to the Company, you agree to not engage in any
employment, business or activity that is in any way competitive with the business
or proposed business of the Company.  You
will disclose to the Company in writing any other gainful employment, business
or activity that you are currently associated with or participate in that competes with the
Company.  You will not assist any other
person or organization in competing with the Company or in preparing to engage in competition with the business or
proposed business of the Company.

 

5.             At Will Employment.  You are an at-will employee
of the Company, which means the employment relationship can be terminated by
either of us for any reason, at any time, with or without prior notice and with
or without cause.  Any statements or
representations to the contrary (and, indeed, any statements contradicting any
provision in this letter) should be regarded by you as ineffective.  Further, your participation in any stock
option or benefit program is not to be regarded as assuring you of continuing
employment for any particular period of time. 
Any modification or change in your at-will employment status may only
occur by way of a written employment agreement signed by you and the Chief
Executive Officer of the Company.

 

6.             Arbitration.  In the event of
a dispute, you and the Company shall submit to mandatory and exclusive binding
arbitration of any controversy or claim arising out of, or relating to, this
Agreement or any breach hereof; provided, however, that the
parties retain their right to, and shall not be prohibited, limited or in any
other way restricted from, seeking or obtaining equitable relief from a court
having jurisdiction over the parties. 
Such arbitration shall be governed by the Federal Arbitration Act and
conducted through the American Arbitration Association in the State of
California, Los Angeles County, before a single neutral arbitrator, in
accordance with the National Rules for the Resolution of Employment
Disputes of the American Arbitration Association in effect at that time.

 

7.             Release from Prior Agreements.  By
signing this Agreement, you acknowledge that you have no claim for any salary,
bonus, or other compensation (other than outstanding stock options) remaining
from prior employment agreements with the Company, written or verbal, including
any “make up” for prior salary reductions or missed salary or bonus increases.

 

Thank you for your contributions to helping make Nexsan a great
company,

 

Signed and agreed this 21st day of November, 2007.

 

 

2

 

	
  Nexsan Technologies, Inc.

  	
   

  	
  Employee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Philip Black

  	
   

  	
  /s/ Rik Mussman

  
	
  Philip Black, CEO

  	
   

  	
  Rik Mussman

  

 

 

3

 

APPENDIX 1 - CHANGE OF CONTROL BONUS

 

A.            If
you (i) remain employed by the Company through the closing date of a
Change of Control (the “COC Date”) or (ii) if
your employment is terminated by the Company within three (3) months
preceding the signing by the Company of a definitive binding agreement which
agreement is performed and results in a COC, subject to normal closing terms
and conditions, unless the Company establishes that the principal reason for
your termination of employment is for a reason unrelated to the COC, you will
receive a Change of Control Bonus on or as soon as practicable following the
COC Date in the amount determined in B below.

 

B.            The
amount of the Change of Control Bonus payable to you in the event of a Change
of Control is determined based on the Sales Price (as defined below) received
in connection with a COC as follows:

 

	
  Sales Price

  (in millions)

  	
   

  	
  Change of Control Bonus

  
	
  Less than $80

  	
   

  	
  $42,320

  
	
  $100

  	
   

  	
  $84,709

  
	
  $125

  	
   

  	
  $138,830

  
	
  $150

  	
   

  	
  $189,576

  
	
  $175

  	
   

  	
  $242,999

  
	
  $200

  	
   

  	
  $296,087

  

 

For Sales Price in between listed values,
lineal interpolation will be used to determine the amount of the Change of
Control Bonus.

 

C.            For
purposes of this Appendix 1, the term “Sales Price” means the gross
equity valuation of the Company immediately prior to the closing of the
transaction constituting a COC determined based on the consideration (in cash
or property) paid in connection with such transaction, but without any
reduction to reflect the Company’s liability for the payment of this Change of
Control Bonus or any similar bonus payable to any other employee of the Company
or Nexsan Corporation (“Holdings”)
on account of consummation of a COC.

 

The term “Change of Control” or
“COC” means any of the following
events: A sale of all or substantially all of Holdings’ or the Company’s
assets.  Any person or entity acquiring
more than 50% of Holdings’ or the Company’s common and preferred stock, other
than a person who is a then-current Major Shareholder.  (For purposes of this definition, a Major
Shareholder shall be Beechtree Capital and its associated Nexsan investors,
VPVP, RRE or GESFID and their respective affiliates, or any other person or
entity controlled, directly or indirectly, by such Major Shareholder.)

 

D.            Notwithstanding
the foregoing, you will not be entitled to receive any portion of the Change of
Control Bonus if there is an IPO prior to the Change of
Control Date and you receive the IPO Bonus pursuant to Appendix 2.

 

 

4

 

APPENDIX 2 - IPO BONUS SHARES

 

A.            If you (i) remain
employed by the Company through the effective date of an IPO (the “IPO Date”) or (ii) if your employment is terminated by the Company
within three (3) months prior to the IPO Date, unless the Company
establishes that the principal reason for your termination of employment is for
a reason unrelated to the IPO, you will receive 300,000 shares of common stock
of Holdings reduced by the number of whole shares (rounded to the nearest whole
share) of common stock of Holdings determined by dividing $84,000 by the fair
market value of a share of common stock Holdings as of the IPO Date (“IPO Bonus Shares”).

 

B.            For
purposes of this Appendix 2, the term “IPO” means
an initial public offering of the common stock of Holdings or the Company.

 

“IPO Price” means the price
at which a share of common of stock of the Company or Holdings, as applicable,
is offered in an IPO.

 

C.            The
Company shall withhold from the IPO Bonus Shares the number of shares of stock
having a fair market value on the date the IPO Bonus Shares are delivered to
you equal to the amount of Federal, state and local income and employment taxes
to be withheld by the Company with respect to your IPO Bonus Shares, and the
Company shall pay cash equal to the fair market value of such withheld shares
to the appropriate tax authorities to satisfy such tax obligations related to
the stock transaction.

 

D.            Notwithstanding
the foregoing, you will not be entitled to receive the IPO Bonus Shares if a
Change of Control occurs prior to the effective date of an IPO and you receive
(or are entitled to receive) the Change of Control Bonus pursuant to Appendix
1.

 

5

 

AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT

 

THIS AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT (the
“Amendment”) is entered into by and between Rik Mussman  (the
“Executive”) and Nexsan Technologies, Inc., a Delaware corporation (the
“Company”) as of April 22, 2008 (the “Effective Date”). The parties,
intending to be legally bound, hereby amend the Employment Agreement dated November 21,
2007 between the Executive and the Company (the “Agreement”) as follows:

 

1.             Amendment
to Agreement.

 

(a)           The
clause “(as adjusted for any subsequent stock splits, stock dividends,
recapitalizations or the like)” shall be inserted in Section A of Appendix
2 immediately after “. . . 300,000 shares of common stock of Holdings” and
immediately before “reduced by the number of whole shares . . .”.

 

(b)           The words “the market value of a
share of common stock Holdings as of the IPO Date”  in
Section A of Appendix 2  shall be
replaced in full with “the initial “Price to Public” per share specified in the
final prospectus with respect to an initial public offering of the Common Stock
of the Company”.

 

2.             Defined
Terms. Except as otherwise stated herein, all capitalized terms used
herein shall have the meanings assigned to such terms in the Agreement.

 

3.             Effectiveness
and Effect of Amendment. This Amendment shall become effective upon
the Effective Date. Except as amended as set forth herein, the Agreement shall
continue in full force and effect. Any and all references to the Agreement
shall mean the Agreement as amended by this Amendment.

 

4.             Counterparts.
This Amendment 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.

 

5.             Choice of
Law. The validity, interpretation, construction and performance of
this Amendment shall be governed by the laws of the State of California (except
their provisions governing the choice of law).

 

 

IN WITNESS WHEREOF, each
of the parties has executed this Amendment, in the case of the Company by its
duly authorized officer, as of the Effective Date.

 

 

	
   

  	
  /s/ Rik Mussman

  
	
   

  	
  Rik Mussman

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Nexsan Technologies, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Philip Black

  
	
   

  	
   

  
	
   

  	
   

  	
  Name: Philip Black

  
	
   

  	
   

  	
  Title: CEO

  
				

 

2

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