NEXSAN CORPORATION
RESTRICTED STOCK PURCHASE AGREEMENT
Unless otherwise defined herein, capitalized terms defined in the 2001
Stock Plan (the "Plan") of Nexsan Corporation (the "Company") shall have the
same meanings when used in this Restricted Stock Purchase Agreement (the
"Agreement").
I. NOTICE OF GRANT OF STOCK PURCHASE RIGHT
DIRECT INVESTORS, LLC. ( the "Purchaser")
You have been granted the right to purchase Common Stock of the
Company, subject to the terms and conditions of this Agreement (the
"Agreement"), as follows:
Grant Number 4
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Date of Grant
Exercise Price Per Share $0.66
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Total Number of Shares Subject to This Stock
Purchase Right ("Shares") 500,000
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Non-Transferability of Stock Purchase Right.
This Stock Purchase Right may not be transferred in any manner and may
be exercised only by Purchaser. The terms of the Plan and this Agreement shall
be binding upon successors and assigns of the Purchaser.
II. AGREEMENT
1. Sale of Stock. The Company hereby agrees to sell to the Purchaser,
and the Purchaser hereby agrees to purchase the number of Shares set forth above
in the Notice of Grant of Stock Purchase Right, at the exercise price per share
set forth in the Notice of Grant of Stock Purchase Right (the "Exercise Price"),
and subject to the terms and conditions of the Plan, which is incorporated
herein by reference. Subject to Section 14(c) of the Plan, in the event of a
conflict between the terms and conditions of the Plan and this Agreement, the
terms and conditions of the Plan shall prevail.
2. Payment of Purchase Price. Purchaser herewith (i) delivers to the
Company the aggregate Exercise Price for the Shares by promissory note ("Note")
in the form of Exhibit A hereto, (ii) pledges the Shares to the Company to
secure the Note pursuant to a Pledge
Agreement in the form of Exhibit B attached hereto and (iii) assigns the Shares
pursuant to an Assignment Separate From Certificate in the form of Exhibit B-1.
3. Purchaser's Representations. In the event the Shares have not been
registered under the Securities Act of 1933, as amended, at the time this Stock
Purchase Right is exercised, the Purchaser shall, if required by the Company,
concurrently with the exercise of all or any portion of this Stock Purchase
Right, deliver to the Company his or her Investment Representation Statement in
the form attached hereto as Exhibit C.
4. Repurchase Option.
(a) In the event the Purchaser's continuous status as an
independent consultant ("Service Provider") terminates for any or no reason
(including death or Disability), the Company shall, upon the date of such
termination (as reasonably fixed and determined by the Company), have an
irrevocable, exclusive option (the "Repurchase Option") for a period of sixty
(60) days from such date to repurchase up to that number of shares which
constitute the Unvested Shares (as defined in Section 5) at the Exercise Price
per share, plus interest at the rate of interest set forth in the Note (the
"Repurchase Price").
(b) The Repurchase Option shall be exercised by the Company by
delivering written notice to the Purchaser or the Purchaser's executor (with a
copy to the Escrow Holder (as defined in Section 7)) and, at the Company's
option, (i) by delivering to the Purchaser or the Purchaser's executor a check
in the amount of the aggregate Repurchase Price, or (ii) by the Company
canceling an amount of the Purchaser's indebtedness to the Company equal to the
aggregate Repurchase Price, or (iii) by a combination of (i) and (ii) so that
the combined payment and cancellation of indebtedness equals such aggregate
Repurchase Price. Upon delivery of such notice and the payment of the aggregate
Repurchase Price in any of the ways described above, the Company shall become
the legal and beneficial owner of the Unvested Shares being repurchased and all
rights and interests therein or relating thereto, and the Company shall have the
right to retain and transfer to its own name the number of Unvested Shares being
repurchased by the Company.
(c) Whenever the Company shall have the right to repurchase
the Unvested Shares hereunder, the Company may designate and assign one or more
employees, officers, directors or shareholders of the Company or other persons
or organizations to exercise all or a part of the Company's Repurchase Option to
purchase all or a part of the Unvested Shares. If the Fair Market Value of the
Unvested Shares to be repurchased on the date of such designation or assignment
(the "Repurchase FMV") exceeds the aggregate Repurchase Price of the Unvested
Shares, then each such designee or assignee shall pay the Company cash equal to
the difference between the Repurchase FMV and the aggregate Repurchase Price of
Unvested Shares to be purchased.
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(d) If the Company or its assignee does not elect to exercise
the Repurchase Option conferred above by giving the requisite notice within
sixty (60) days following Purchaser's termination as a Service Provider, the
Repurchase Option shall terminate.
5. Release of Shares From Repurchase Option (Vesting).
(a) All of the Shares purchased pursuant to this Agreement
shall be released from the Repurchase Option (sometimes hereafter referred to as
"vest" or "vesting") on January 1, 2002.
(b) Any of the Shares which have not yet been released from
the Company's Repurchase Option are referred to herein as "Unvested Shares."
(c) In the event that Purchaser's relationship as a Service
Provider with the Company shall terminate prior to the vesting of all Shares
purchased under this Agreement all Unvested Shares shall cease to vest pursuant
to this Agreement.
6. Restriction on Transfer. Except for the escrow described in
Section 7 of this Agreement or transfer of the Shares to the Company or its
assignees contemplated by this Agreement or the Pledge Agreement (in the form
attached hereto as Exhibit B), none of the Shares or any beneficial interest
therein shall be transferred, encumbered or otherwise disposed of in any way
until the release of such Shares from the Company's Repurchase Option in
accordance with the provisions of this Agreement.
7. Escrow of Shares.
(a) To ensure the availability for delivery of the Purchaser's
Unvested Shares upon exercise of the Repurchase Option by the Company, the
Purchaser shall, upon execution of this Agreement, deliver and deposit with an
escrow holder designated by the Company (the "Escrow Holder") and reasonably
acceptable to the Purchaser the share certificates representing the Unvested
Shares, together with the Assignment Separate from Certificate (the "Stock
Assignment") duly endorsed in blank, in the form attached hereto as Exhibit D.
The Unvested Shares and Stock Assignment shall be held by the Escrow Holder,
pursuant to the Joint Escrow Instructions of the Company and Purchaser in the
form attached as Exhibit E hereto, until such time as the Company's Repurchase
Option expires.
(b) The Escrow Holder shall not be liable for any act it may
do or omit to do with respect to holding the Unvested Shares in escrow and while
acting in good faith and in the exercise of its judgment.
(c) If the Company or any assignee exercises its Repurchase
Option hereunder, the Escrow Holder, upon receipt of written notice of such
option exercise from the proposed transferee, shall take all steps necessary to
accomplish such transfer.
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(d) When the Repurchase Option has been exercised or expires
unexercised, and a portion of the Shares has been released from such Repurchase
Option, the Escrow Holder shall promptly upon request, but not more frequently
than once each year, cause a new certificate to be issued for such released
Shares and shall deliver such certificate to the Company or the Purchaser, as
the case may be.
(e) Subject to the terms hereof, the Purchaser shall have all
the rights of a shareholder with respect to such Shares while they are held in
escrow, including without limitation, the right to vote the Shares and receive
any cash dividends declared thereon. If, from time to time during the term of
the Company's Repurchase Option, there is (i) any stock dividend, stock split or
other change in the Shares, or (ii) any merger or sale of all or substantially
all of the assets or other acquisition of the Company, any and all new,
substituted or additional securities to which the Purchaser is entitled by
reason of the Purchaser's ownership of the Shares shall be immediately subject
to this escrow, deposited with the Escrow Holder and included thereafter as
"Shares" for purposes of this Agreement and the Company's Repurchase Option.
8. Company's Right of First Refusal. Before any Shares held by
Purchaser or any transferee (either being sometimes referred to herein as the
"Holder") may be sold or otherwise transferred (including transfer by gift or
operation of law), the Company or 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").
(a) 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).
(b) 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 purchase price determined in accordance with subsection (c)
below.
(c) Purchase Price. The purchase price ("Purchase Price") for
the Shares purchased by the Company or its assignee(s) under this Section shall
be (i) the Offered Price in the case of Shares that are vested or (ii) in the
case of Shares that are Unvested Shares, the lower of the Offered Price or the
Repurchase Price as defined in Section 4(a) hereof. 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.
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(d) Payment. Payment of the Purchase Price shall be made, at
the option of the Company or its assignee(s), (i) by cash or check, (ii) by
cancellation of all or a portion of any outstanding indebtedness of the Holder
to the Company (or, in the case of repurchase by an assignee, to the assignee),
or (iii) by any combination thereof within thirty (30) days after receipt of the
Notice or in the manner and at the times set forth in the Notice.
(e) 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, that are not repurchased by the Company,
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 provisions of this Section
shall continue to apply to the Shares in the hands of such Proposed Transferee.
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.
(f) 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 1933 Act.
9. Restrictive Legends; Stop-Transfer Orders; Refusal to
Transfer.
(a) Purchaser understands and agrees that the Company shall
cause the legends set forth below or legends substantially equivalent thereto,
to be placed upon any certificate(s) evidencing ownership of the Shares together
with any other legends that may be required by the Company or by applicable
state or federal securities laws:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 (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, SUCH OFFER, SALE OR TRANSFER, PLEDGE OR
HYPOTHECATION IS IN COMPLIANCE THEREWITH.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
CERTAIN RESTRICTIONS ON TRANSFER, A RIGHT OF FIRST REFUSAL,
AND A REPURCHASE OPTION
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HELD BY THE ISSUER OR ITS ASSIGNEE(S) AS SET FORTH IN THE
RESTRICTED STOCK PURCHASE AGREEMENT BETWEEN THE ISSUER AND THE
ORIGINAL HOLDER OF THESE SHARES, A COPY OF WHICH MAY BE
OBTAINED AT THE PRINCIPAL OFFICE OF THE ISSUER. SUCH TRANSFER
RESTRICTIONS, RIGHT OF FIRST REFUSAL AND REPURCHASE OPTION ARE
BINDING ON TRANSFEREES OF THESE SHARES.
(b) Stop-Transfer Notices. Purchaser agrees that, in order to
ensure compliance with the restrictions referred to herein, the Company may
issue appropriate "stop transfer" instructions to its transfer agent, if any,
and that, if the Company transfers its own securities, it may make appropriate
notations to the same effect in its own records.
(c) Refusal to Transfer. The Company shall not be required (i)
to transfer on its books any Shares that have been sold or otherwise transferred
in violation of any of the provisions of this Agreement or (ii) to treat as
owner of such Shares or to accord the right to vote or pay dividends to any
purchaser or other transferee to whom such Shares shall have been so
transferred.
10. Lock-Up Period. Purchaser 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, Purchaser (or any transferee
under Section 8 of this Agreement) 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.
11. Tax Consequences. Set forth below is a brief summary as of the date
of grant of this Stock Purchase Right of some of the federal tax consequences of
exercise of this Stock Purchase Right and disposition of the Shares. THIS
SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT
TO CHANGE.
(a) Exercise of Stock Purchase Right. Generally, no income
will be recognized by Purchaser in connection with the exercise of the stock
purchase right for shares subject to the Repurchase Option, unless an election
under Section 83(b) of the Code is filed with the Internal Revenue Service
within 30 days of the date of exercise of the right to purchase stock. The form
for making this election is attached as Exhibit F hereto. Otherwise, as the
Company's
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repurchase right lapses, Purchaser will recognize compensation income in an
amount equal to the difference between the Fair Market Value of the stock at the
time the Company's repurchase right lapses and the amount paid for the stock, if
any (the "Spread"). If Purchaser is a Service Provider or former Service
Provider, the Spread will be subject to tax withholding by the Company, and the
Company will be entitled to a tax deduction in the amount at the time the
Purchaser recognizes ordinary income with respect to a Stock Purchase Right.
(b) Disposition of Shares. Upon disposition of the Shares, any
gain or loss is treated as capital gain or loss. If the Shares are held for more
than one year, any gain realized on disposition of the shares will be treated as
long-term capital gain for federal income tax purposes. Long-term capital gains
are grouped and netted by holding periods. Net capital gains on assets held for
more than 12 months is capped at 20%. Capital losses are allowed in full against
capital gains, and up to $3,000 against other income.
THE PURCHASER ACKNOWLEDGES THAT IT IS THE PURCHASER'S SOLE
RESPONSIBILITY AND NOT THE COMPANY'S TO FILE TIMELY THE ELECTION UNDER SECTION
83(b), EVEN IF THE PURCHASER REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE
THIS FILING ON THE PURCHASER'S BEHALF.
12. No Guarantee of Continued Service. PURCHASER ACKNOWLEDGES AND
AGREES THAT THE RELEASE OF SHARES FROM THE REPURCHASE OPTION OF THE COMPANY
PURSUANT TO PARAGRAPH 5 HEREOF IS EARNED ONLY BY CONTINUING SERVICE AS SERVICE
PROVIDER (NOT THROUGH THE ACT OF BEING HIRED OR PURCHASING SHARES HEREUNDER).
PURCHASER FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE TRANSACTIONS
CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT
CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A SERVICE
PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL.
13. Notices. Any notice, demand or request required or permitted to be
given by either the Company or the Purchaser pursuant to the terms of this
Agreement shall be in writing and may be delivered by hand, by nationally
recognized private courier, or by certified mail. Notices delivered by hand or
by nationally recognized private courier shall be deemed given when delivered
personally to the addressee or to the courier, or if given by certified mail
when deposited in the U.S. mail, certified and with postage prepaid, and
addressed to the parties at the addresses of the parties set forth at the end of
this Agreement or such other address as a party may request by notifying the
other in writing.
Any notice to the Escrow Holder shall be sent to the Company's
address with a copy to the other party not sending the notice.
14. No Waiver. Either party's failure to enforce any provision or
provisions of this Agreement shall not in any way be construed as a waiver of
any such provision or provisions, nor
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prevent that party from thereafter enforcing each and every other provision of
this Agreement. The rights granted both parties herein are cumulative and shall
not constitute a waiver of either party's right to assert all other legal
remedies available to it under the circumstances.
15. Successors and Assigns. The Company may assign any of its rights
under this Agreement to single or multiple assignees, and this Agreement shall
inure to the benefit of the successors and assigns of the Company. Subject to
the restrictions on transfer herein set forth, this Agreement shall be binding
upon Purchaser its successors and assigns.
16. Interpretation. Any dispute regarding the interpretation of this
Agreement shall be submitted by Purchaser or by the Company forthwith to the
Administrator which shall review such dispute at its next regular meeting. The
resolution of such a dispute by the Administrator shall be final and binding on
all parties.
17. Governing Law; Severability. This Agreement is governed by the
internal substantive laws, but not the choice of law rules, of New York.
18. Entire Agreement. The Plan is incorporated herein by reference.
This Agreement (including the exhibits referenced herein), the Plan and the
Investment Representation Statement constitute the entire agreement of the
parties with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company and Purchaser with
respect to the subject matter hereof, and may not be modified adversely to the
Purchaser's interest except by means of a writing signed by the Company and
Purchaser.
By Purchaser's signature below, Purchaser represents that he
or she is familiar with the terms and provisions of the Plan, and hereby accepts
this Agreement subject to all of the terms and provisions thereof. Purchaser has
reviewed the Plan and this Agreement in their entirety, has had an opportunity
to obtain the advice of counsel prior to executing this Agreement and fully
understands all provisions of this Agreement. Purchaser agrees to accept as
binding, conclusive and final all decisions or interpretations of the
Administrator upon any questions
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arising under the Plan or this Agreement. Purchaser further agrees to notify the
Company upon any change in the residence indicated in the Notice of Grant of
Stock Purchase Right.
DIRECT INVESTORS, LLC. NEXSAN CORPORATION
Address: Address:
C/O Direct Brokerage, Inc. ▇/▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇.
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇. (▇▇ ▇▇▇▇▇) ▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
By: /s/ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------- -------------------------------
Name Printed: ▇. ▇▇▇▇▇▇▇ ▇▇▇▇ Name Printed: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Managing Member Title: CEO
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PROMISSORY NOTE
$330,000 January 4, ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
FOR VALUE RECEIVED, the undersigned, DIRECT INVESTORS, LLC, (the
"Payor"), with an address at c/o Direct Brokerage, Inc. ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇. ▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇,▇▇ ▇▇▇▇▇, promises to pay to the order of NEXSAN CORPORATION, a
Delaware corporation ("Payee") with offices at c/o Beechtree Capital Ltd., ▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, the principal amount of Three
Hundred and Thirty Thousand ($330,000) 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
third anniversary of the date hereof.
This Note is issued by the Payor as payment in connection with the
purchase by the Payor of five hundred thousand (500,000) 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
consulting 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 consulting 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 accrued and unpaid interest hereon, and 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.
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.
IN WITNESS WHEREOF, this Note has been executed and delivered by the
Payor on the date specified above.
By: /s/ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇
----------------------------------
Name: ▇. ▇▇▇▇▇▇▇ ▇▇▇▇, as Payor
Title: Managing Member
ACCEPTED:
NEXSAN CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: CEO
EXHIBIT B
PLEDGE AGREEMENT
THE PLEDGE AGREEMENT (the "Agreement"), entered into as of
____________, 2001, by and between Nexsan Corporation ("Secured Party") and
__________ (the "Pledgor").
W I T N E S S E T H:
WHEREAS, Pledgor has purchased from the Secured Party
______________shares ("Shares") of the common stock of Corporation, a Delaware
corporation (the "Corporation"), pursuant to the Restricted Stock Purchase
Agreement and exhibits thereto (collectively the "Agreement"), dated the date
hereof between Pledgor and the Secured Party ("Stock Purchase Agreement"); and
WHEREAS, Pledgor has agreed to pledge the Shares as security for the
Promissory Note of even date herewith, made by Pledgor to the order of the
Secured Party pursuant to the Stock Purchase Agreement (the "Note").
NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Warranty and Covenant. Pledgor represents and warrants to the
Secured Party that except for the security interest created hereby, and except
for restrictions imposed by the Restricted Stock Purchase Agreement, he owns the
Shares free and clear of all liens, charges and encumbrances and that he has the
unencumbered right to pledge such Shares pursuant to the terms hereof.
2. Pledge. As security for the prompt payment and performance when due
(whether at stated maturity, by acceleration or otherwise) of all indebtedness
and all other liabilities and obligations, whether now existing or hereafter
arising, of Pledgor to the Secured Party under or arising out of the Note
(collectively, the "Obligations"), Pledgor hereby delivers, pledges and assigns
to Secured Party and creates in Secured Party a perfected first security
interest in all of Pledgor's right, title and interest in, to and under all of
the Shares, together with (subject to the terms of Section 3 hereof) all rights
and privileges of Pledgor with respect thereto, all proceeds, income and profits
thereof and all property received in addition thereto, in exchange thereof or in
substitution therefor and in any other property or assets of equal value as may
from time to time be substituted by mutual agreement of the parties hereto as
collateral security hereunder (all such property of Pledgor being hereinafter
referred to collectively as the "Collateral").
3. Rights of Pledgor. So long as no Default has occurred and is
continuing (as used, herein, the term "Default" shall mean and include (i) the
failure of Pledgor to perform any of her Obligations when due, (ii) any material
misrepresentation by Pledgor in or with respect to any provision of the
Agreement or the Note, or (iii) any attachment of the Collateral at any time
pursuant to any court order or other legal process), (a) Pledgor shall be
entitled to vote or consent with respect to the Collateral in any manner not
inconsistent with the Agreement or the Note, and (b) all cash distributions with
respect to the Shares shall, anything in Section 2 or elsewhere herein to the
contrary notwithstanding, be the sole and exclusive property of Pledgor.
4. Event of Default. In the event of the occurrence of an Event of
Default, as such term is defined in the Note, and the continuation of such Event
of Default uncured beyond any applicable notice or other grace period, Secured
Party may sell or otherwise dispose of the Collateral at a public or private
sale or make other commercially reasonable disposition of the Collateral or any
portion thereof after twenty-one (21) calendar days' notice to the Pledgor. Any
proceeds of the disposition of the Collateral in excess of the then outstanding
Obligations shall promptly be remitted to Pledgor by the Secured Party.
If any consent, approval or authorization of any state,
municipal or other governmental department, agency or authority should be
necessary to effectuate any sale or other disposition of the Collateral, or any
partial disposition of the Collateral, Pledgor agrees to execute all such
applications and other instruments as may be required in connection with
securing any such consent, approval or authorization, and will otherwise use her
reasonable best efforts to secure the same. Pledgor further agrees to use her
reasonable best efforts (without incurring any additional cost or expense) to
secure such sale or other disposition of the Collateral as the Secured Party may
deem necessary pursuant to the terms of the Agreement
5. Additional Rights of the Secured Party. In addition to its rights
and privileges under the Agreement, the Secured Party shall have all the rights,
powers and privileges of a secured party under the Uniform Commercial Code as in
effect in any applicable jurisdiction.
6. Binding Agreement. The Agreement shall be construed and interpreted
in accordance with the internal laws of the State of New York applicable to
agreements made and to be performed wholly within the State of New York. The
Agreement, together with all documents referred to herein, constitutes the
entire agreement between the parties with respect to the matters addressed
herein and may not be modified except by a writing executed by Pledgor and the
Secured Party.
7. Covenants. The Secured Party covenants that, provided no Default or
Event of Default (as defined in the Note) shall exist and be continuing, it
shall release Shares from the pledge created hereby upon payment of a pro rata
portion of the Note and accrued interest; provided, that such Shares shall be
delivered by Secured Party to the Escrow Holder (as defined in the Stock
Purchase Agreement) to be held and disposed of in accordance with the terms of
the Stock Purchase Agreement.
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8. Termination. The Agreement shall continue in full force and effect
until all the Obligations shall have been fully and indefeasibly paid in full.
The Collateral shall be delivered to the Escrow Holder upon full payment,
satisfaction and termination of all of the Obligations, to be held and disposed
of in accordance with the terms of the Agreement.
9. Further Assurances. Pledgor shall at any time and from time to time
upon the written request of the Secured Party, execute and deliver such further
documents and do such further acts and things as the Secured Party may
reasonably request in order to effect the purposes of the Agreement.
10. Severability. If any paragraph herein, or part thereof, shall for
any reason be held or adjudged to be invalid, illegal or unenforceable by any
court of competent jurisdiction, such paragraph or part thereof so adjudicated
invalid, illegal or unenforceable shall be deemed separate, distinct and
independent, and the remainder of the Agreement shall remain in full force and
effect and shall not be affected by such holding or adjudication.
11. Successors and Assigns. The Agreement, and the terms and conditions
hereof, shall be binding upon and shall inure to the benefit of the Pledgor and
his or her successors and assigns, and the Secured Party and his or her
successors and assigns; provided that Pledgor may not assign or delegate his or
her obligations hereunder without the prior written consent of the Secured Party
and any purported assignment or delegation by Pledgor of his or her obligations
hereunder in the absence of such written consent shall be void.
12. Notices. All notices and other communication provided for herein
shall be in writing and mailed, by registered or certified mail, return receipt
requested, or delivered by overnight courier or by hand, to the intended
recipient at the "Address for Notices" specified below intended recipient's name
on the signature page hereof; or, as to either party, at such other address as
shall hereafter be designated by such party in a notice to the other party.
Except as otherwise provided in the Agreement, all notices and other
communications hereunder shall be deemed to have been duly given when received
by the intended recipient.
13. Counterparts. The Agreement may be executed in any number of
counterpart copies, each of which shall be deemed an original, but which
together shall constitute a single instrument.
14. Headings. Descriptive headings appearing herein are included solely
for convenience of reference and are not intended to affect the meaning or
construction of any of the provisions of the Agreement.
[The remainder of this page is intentionally blank.]
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IN WITNESS WHEREOF, the undersigned parties hereto have executed the
Agreement, as of the day and year first above written.
_____________________________________________
_________________________, as Pledgor
Address for Notices: ___________________
___________________
NEXSAN CORPORATION
By: _______________________________________
Name Printed: _______________
Title: ______________________
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EXHIBIT B-1
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED the undersigned, __________________________, does
hereby sell, assign and transfer unto ___________________ (__________) shares of
the Common Stock of Nexsan Corporation, standing in the name of the undersigned
on the books of said corporation represented by Certificate No._____ herewith
and does hereby irrevocably constitute and appoint
______________________________ to transfer the said stock on the books of the
within named corporation with full power of substitution in the premises.
This Stock Assignment may be used only in accordance with the Pledge
Agreement between Nexsan Corporation and the undersigned dated
_________________.
Dated: _________________, _____ Signature:______________________________
INSTRUCTIONS: Please do not fill in any blanks other than the signature line.
The purpose of this assignment is to enable the Company to exercise its
Repurchase Option as set forth in the Agreement, without requiring additional
signatures on the part of the Purchaser.
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EXHIBIT C
INVESTMENT REPRESENTATION STATEMENT
PURCHASER: ________________________
COMPANY: Nexsan Corporation
SECURITY: COMMON STOCK
AMOUNT: _______________ shares
DATE: _________________
In connection with the purchase of the above-listed shares of common
stock (the "Securities"), the undersigned Purchaser represents to the Company
the following:
Purchaser is aware of the Company's business affairs and financial
condition and has acquired sufficient information about the Company to reach an
informed and knowledgeable decision to acquire the Securities. Purchaser is
acquiring these Securities for investment for Purchaser's own account only and
not with a view to, or for resale in connection with, any "distribution" thereof
within the meaning of the Securities Act of 1933, as amended (the "Securities
Act").
Purchaser acknowledges and understands that the Securities constitute
"restricted securities" under the Securities Act and have not been registered
under the Securities Act in reliance upon a specific exemption therefrom, which
exemption depends upon, among other things, the bona fide nature of Purchaser's
investment intent as expressed herein. In this connection, Purchaser understands
that, in the view of the Securities and Exchange Commission, the statutory basis
for such exemption may be unavailable if Purchaser's representation was
predicated solely upon a present intention to hold these Securities for the
minimum capital gains period specified under tax statutes, for a deferred sale,
for or until an increase or decrease in the market price of the Securities, or
for a period of one (1) year or any other fixed period in the future. Purchaser
further understands that the Securities must be held indefinitely unless they
are subsequently registered under the Securities Act or an exemption from such
registration is available. Purchaser further acknowledges and understands that
the Company is under no obligation to register the Securities. Purchaser
understands that the certificate evidencing the Securities will be imprinted
with a legend which prohibits the transfer of the Securities unless they are
registered or such registration is not required in the opinion of counsel
satisfactory to the Company, a legend prohibiting their transfer without the
consent of the Commissioner of Corporations of the State of Delaware and any
other legend required under applicable state securities laws.
Purchaser is familiar with the provisions of Rule 701 and Rule 144,
each promulgated under the Securities Act, which, in substance, permit limited
public resale of "restricted securities" acquired, directly or indirectly from
the issuer thereof, in a non-public offering subject to the satisfaction of
certain conditions. Rule 701 provides that if the issuer qualifies under Rule
701 at the time of the grant of the Stock Purchase Right to the Purchaser, the
exercise will be exempt from
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registration under the Securities Act. In the event the Company becomes subject
to the reporting requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, ninety (90) days thereafter (or such longer period as any market
stand-off agreement may require) the Securities exempt under Rule 701 may be
resold, subject to the satisfaction of certain of the conditions specified by
Rule 144, including: (1) the resale being made through a broker in an
unsolicited "broker's transaction" or in transactions directly with a market
maker (as said term is defined under the Securities Exchange Act of 1934); and,
in the case of an affiliate, (2) the availability of certain public information
about the Company, (3) the amount of Securities being sold during any three (3)
month period not exceeding the limitations specified in Rule 144(e), and (4) the
timely filing of a Form 144, if applicable.
In the event that the Company does not qualify under Rule 701 at the
time of grant of the Stock Purchase Right, then the Securities may be resold in
certain limited circumstances subject to the provisions of Rule 144, which
requires the resale to occur not less than one (1) year after the later of the
date the Securities were sold by the Company or the date the Securities were
sold by an affiliate of the Company, within the meaning of Rule 144; and, in the
case of acquisition of the Securities by an affiliate, or by a non-affiliate who
subsequently holds the Securities less than two (2) years, the satisfaction of
the conditions set forth in sections (1), (2), (3) and (4) of the paragraph
immediately above.
Purchaser further understands that in the event all of the applicable
requirements of Rule 701 or 144 are not satisfied, registration under the
Securities Act, compliance with Regulation A, or some other registration
exemption will be required; and that, notwithstanding the fact that Rules 144
and 701 are not exclusive, the Staff of the Securities and Exchange Commission
has expressed its opinion that persons proposing to sell private placement
securities other than in a registered offering and otherwise than pursuant to
Rules 144 or 701 will have a substantial burden of proof in establishing that an
exemption from registration is available for such offers or sales, and that such
persons and their respective brokers who participate in such transactions do so
at their own risk. Purchaser understands that no assurances can be given that
any such other registration exemption will be available in such event.
Signature of Purchaser:
______________________________________
Print Name: __________________________
Date: _____________________________
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EXHIBIT D
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED, the undersigned, __________________________, does
hereby sell, assign and transfer unto ___________________ (__________) shares of
the Common Stock of Nexsan Corporation, standing in the name of the undersigned
on the books of said corporation represented by Certificate No._____ herewith
and does hereby irrevocably constitute and appoint
______________________________ to transfer the said stock on the books of the
within named corporation with full power of substitution in the premises.
This Stock Assignment may be used only in accordance with the
Restricted Stock Purchase Agreement between Nexsan Corporation and the
undersigned dated ______________, ____.
Dated: _______________, _____ Signature:______________________________
INSTRUCTIONS: Please do not fill in any blanks other than the signature line.
The purpose of this assignment is to enable the Company to exercise its
Repurchase Option as set forth in the Agreement, without requiring additional
signatures on the part of the Purchaser.
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EXHIBIT E
JOINT ESCROW INSTRUCTIONS
___________________, _____
Mr. __________________________
Secretary, Nexsan Corporation
_____________________________
_____________________________
Dear Sir:
As Escrow Agent for both Nexsan Corporation, a Delaware corporation
(the "Company"), and the undersigned purchaser of stock of the Company (the
"Purchaser"), you are hereby authorized and directed to hold the documents
delivered to you pursuant to the terms of that certain Restricted Stock Purchase
Agreement ("Agreement") between the Company and the undersigned, in accordance
with the following instructions:
a. In the event the Company and/or any assignee of the Company
(referred to collectively for convenience herein as the "Company") exercises the
Company's repurchase option set forth in the Agreement (the "Repurchase
Option"), the Company shall give to Purchaser and you a written notice
specifying the number of shares of stock to be purchased, the purchase price,
and the time for a closing hereunder at the principal office of the Company.
Purchaser and the Company hereby irrevocably authorize and direct you to close
the transaction contemplated by such notice in accordance with the terms of said
notice.
b. At the closing, you are directed (i) to date the stock assignments
necessary for the transfer in question, (ii) to fill in the number of shares
being transferred, and (iii) to deliver same, together with the certificate
evidencing the shares of stock to be transferred, to the Company or its
assignee, against the simultaneous delivery to you of the purchase price (by
cash, a check, or some combination thereof) for the number of shares of stock
being purchased pursuant to the exercise of the Repurchase Option.
c. Purchaser irrevocably authorizes the Company to deposit with you any
certificates evidencing shares of stock to be held by you hereunder and any
additions to and substitutions for said shares as defined in the Agreement.
Purchaser does hereby irrevocably constitute and appoint you as Purchaser's
attorney-in-fact and agent for the term of this escrow to execute with respect
to such securities all documents necessary or appropriate to make such
securities negotiable and to complete any transaction herein contemplated,
including but not limited to the filing with any applicable state blue sky
authority of any required applications for consent to, or notice of transfer of,
the securities. Subject to the provisions of this paragraph (c), Purchaser shall
exercise all rights and privileges of a shareholder of the Company while the
stock is held by you.
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d. Once per calendar year and upon termination of this escrow, unless
the Repurchase Option has been exercised, you will deliver to Purchaser a
certificate or certificates representing so many shares of stock as are not then
subject to the Repurchase Option. Within ninety (90) days after cessation of
Purchaser's continuous service - rendering to the Company, or any parent or
subsidiary of the Company, you will deliver to Purchaser a certificate or
certificates representing the aggregate number of shares held or issued pursuant
to the Agreement and not purchased by the Company or its assignees pursuant to
exercise of the Repurchase Option.
e. If at the time of termination of this escrow you should have in your
possession any documents, securities, or other property belonging to Purchaser,
you shall deliver all of the same to Purchaser and shall be discharged of all
further obligations hereunder.
f. Your duties hereunder may be altered, amended, modified or revoked
only by a writing signed by all of the parties hereto.
g. You shall be obligated only for the performance of such duties as
are specifically set forth herein and may rely and shall be protected in relying
or refraining from acting on any instrument reasonably believed by you to be
genuine and to have been signed or presented by the proper party or parties. You
shall not be personally liable for any act you may do or omit to do hereunder as
Escrow Agent or as attorney-in-fact for Purchaser while acting in good faith,
and any act done or omitted by you pursuant to the advice of your own attorneys
shall be conclusive evidence of such good faith.
h. You are hereby expressly authorized to disregard any and all
warnings given by any of the parties hereto or by any other person or
corporation, excepting only orders or process of courts of law and are hereby
expressly authorized to comply with and obey orders, judgments or decrees of any
court. In case you obey or comply with any such order, judgment or decree, you
shall not be liable to any of the parties hereto or to any other person, firm or
corporation by reason of such compliance, notwithstanding any such order,
judgment or decree being subsequently reversed, modified, annulled, set aside,
vacated or found to have been entered without jurisdiction.
i. You shall not be liable in any respect on account of the identity,
authorities or rights of the parties executing or delivering or purporting to
execute or deliver the Agreement or any documents or papers deposited or called
for hereunder.
j. You shall be entitled to employ such legal counsel and other experts
as you may deem necessary properly to advise you in connection with your
obligations hereunder, may rely upon the advice of such counsel, and may pay
such counsel reasonable compensation therefor.
k. Your responsibilities as Escrow Agent hereunder shall terminate if
you shall cease to be an officer or agent of the Company or if you shall resign
by written notice to each party. In the event of any such termination, the
Company shall appoint a successor Escrow Agent.
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l. If you reasonably require other or further instruments in connection
with these Joint Escrow Instructions or obligations in respect hereto, the
necessary parties hereto shall join in furnishing such instruments.
m. It is understood and agreed that should any dispute arise with
respect to the delivery and/or ownership or right of possession of the
securities held by you hereunder, you are authorized and directed to retain in
your possession without liability to anyone all or any part of said securities
until such disputes shall have been settled either by mutual written agreement
of the parties concerned or by a final order, decree or judgment of a court of
competent jurisdiction after the time for appeal has expired and no appeal has
been perfected, but you shall be under no duty whatsoever to institute or defend
any such proceedings.
n. Any notice required or permitted hereunder shall be given in writing
and shall be deemed effectively given upon personal delivery or upon deposit in
the United States Post Office, by registered or certified mail with postage and
fees prepaid, addressed to each of the other parties thereunto entitled at the
following addresses or at such other addresses as a party may designate by ten
(10) days' advance written notice to each of the other parties hereto.
COMPANY: Nexsan Corporation
_________________________________
_________________________________
PURCHASER: _________________________________
_________________________________
_________________________________
ESCROW AGENT: _________________________________
_________________________________
_________________________________
o. By signing these Joint Escrow Instructions, you become a party
hereto only for the purpose of said Joint Escrow Instructions; you do not become
a party to the Agreement.
p. This instrument shall be binding upon and inure to the benefit of
the parties hereto, and their respective successors and permitted assigns.
q. The Restricted Stock Purchase Agreement is incorporated herein by
reference. These Joint Escrow Instructions, the 2001 Stock Plan, and the
Restricted Stock Purchase Agreement (including the exhibits referenced therein)
constitute the entire agreement of the parties with respect to the subject
matter hereof and supersede in their entirety all prior undertakings and
agreements of the Escrow Agent, the Purchaser and the Company with respect to
the subject matter hereof, and
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may not be modified except by means of a writing signed by the Escrow Agent, the
Purchaser and the Company.
r. These Joint Escrow Instructions shall be governed by, and construed
and enforced in accordance with, the laws of the State of New York.
Very truly yours,
Nexsan Corporation
By: _______________________________________
Printed Name:______________________
Title:_____________________________
PURCHASER:
____________________________________________
(Signature)
____________________________________________
(Typed or Printed Name)
ESCROW AGENT:
______________________________
______________________________
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EXHIBIT F
ELECTION UNDER SECTION 83(b)
OF THE INTERNAL REVENUE CODE OF 1986
The undersigned taxpayer hereby elects, pursuant to the
above-referenced Federal Tax Code, to include in taxpayer's gross income for the
current taxable year, the amount of any compensation taxable to taxpayer in
connection with his receipt of the property described below:
a. The name, address, taxpayer identification number and taxable year
of the undersigned are as follows:
NAME:
ADDRESS:
IDENTIFICATION NO.:
TAXABLE YEAR: 200_
b. The property with respect to which the election is made is described
as follows: ___________________shares (the "Shares") of the Common Stock of
Nexsan Corporation (the "Company").
c. The date on which the property was transferred is: ________________,
2001.
d. The property is subject to the following restrictions: The Shares
may be repurchased by the Company, or its assignee, upon the taxpayer ceasing to
perform services for the Company. This repurchase right lapses with regard to a
portion of the Shares based on the continuous performance of services over a
period of time.
e. The fair market value at the time of transfer, determined without
regard to any restriction other than a restriction which by its terms will never
lapse, of such property is: $ ____________ per share.
f. The amount (if any) paid for such property is: $ ____________ per
share.
The undersigned has submitted a copy of this statement to the person
for whom the services were performed in connection with the undersigned's
receipt of the above-described property. The transferee of such property is the
person performing the services in connection with the transfer of said property.
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The undersigned understands that the foregoing election may not be
revoked except with the consent of the Commissioner.
Dated: ______________________, _____
______________________________________, Taxpayer
Printed Name: ______________________________________
