PRIVATE & CONFIDENTIAL July 15, 2013 Eric L. Kelly 307 Pheasant Run Drive Danville, CA 94506 Dear Sir: Re: Board Nomination Right

PRIVATE & CONFIDENTIAL

July 15, 2013

Xxxx X. Xxxxx
000 Xxxxxxxx Xxx Xxxxx
Xxxxxxxx, XX
00000

Dear Sir:

Re:        Board Nomination Right

The purpose of this letter agreement (this “Agreement”) is to set forth the terms and conditions upon which Xxxx X. Xxxxx (“Xxxxx”) shall be entitled to nominate a director of Sphere 3D Corporation (the “Corporation”).

1.	The Corporation agreed on the date hereof that the board of directors will be expanded to not more than six (6) members and Xxxxx will be named a director of the Corporation.
2.	The Corporation agrees that, so long as Xxxxx, and persons affiliated with Xxxxx (excluding, for greater certainty, Overland Storage, Inc.) collectively own (or have a right to acquire) 1,850,000 or more of the outstanding common shares in the capital of the Corporation (“Common Shares”), Xxxxx shall be entitled to nominate one director of the Corporation (the “Xxxxx Nominee”). For greater certainty, Xxxx X. Xxxxx shall initially serve as the Xxxxx Nominee and shall continue to serve in such capacity, unless he is unable to do so.
3.	The parties acknowledge and agree that the Xxxxx Nominee must be eligible to serve as a director of the Corporation pursuant to applicable laws and is not in breach of the terms of this Agreement.
4.	The parties acknowledge and agree that the Xxxxx Xxxxxxx shall immediately resign as a director of the Corporation (and a replacement Xxxxx Xxxxxxx may be appointed by Xxxxx) in the event that one of the following events occur relating to the Corporation with respect to the Xxxxx Xxxxxxx:

	(A)	fraudulent misrepresentation as to qualifications;
	(B)	willful misconduct;
	(C)	material breach of fiduciary or statutory duty;
	(D)	fraud or material dishonesty;

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	(E)	material theft;
	(F)	any action constituting misconduct, dishonesty, or neglect in the performance of his duties and responsibilities as a director;
	(G)	willful breach or habitual neglect of significant and material duties as a director;
	(H)	conviction of a criminal offence punishable by indictment; or
	(I)	conviction of a criminal offence punishable by summary conviction or any other conduct where such conviction or conduct brings into question the Xxxxx Xxxxxxx’s ability to perform his duties under this Agreement honestly and effectively or where such conviction or conduct could adversely affect the reputation and goodwill of the Corporation.

5. If as of the date (the “Determination Date”) of any management information circular (or similar document) distributed by the Corporation in connection with any meeting of the shareholders of the Corporation (a “Shareholders’ Meeting”) at which directors are to be elected, so long as Xxxxx and persons affiliated with Xxxxx collectively own (or have a right to acquire) 1,850,000 or more of the outstanding common shares in the capital of the Corporation, the Corporation shall include the Xxxxx Nominee in the slate of directors proposed by the Corporation’s management for election at the Shareholders’ Meeting. The Corporation shall give Xxxxx not less than fifteen (15) business days’ written notice of each Determination Date. The identity of the Xxxxx Nominee shall be communicated by Xxxxx in writing to the Corporation at least five (5) business days before the Determination Date, failing which the Xxxxx Nominee shall be the same Xxxxx Xxxxxxx as was serving on the board of directors of the Corporation on the Determination Date.

General

6.	Each of the parties shall promptly do, execute, deliver or cause to be done, executed and delivered all further acts, documents and things in connection with this Agreement that the other party may reasonably require for the purposes of giving effect to this Agreement.
7.	This Agreement shall enure to the benefit of, and be binding on, the parties and their respective heirs, legal representatives, successors and permitted assigns, as the case may be. No party may assign or transfer, whether absolutely, by way of security or otherwise, all or any part of its or his respective rights or obligations under this Agreement without the prior written consent of the other parties.
8.	No amendment of this Agreement will be effective unless made in writing and signed by each of the parties.

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9.	This Agreement constitutes the entire agreement between the parties pertaining to the subject matter of this Agreement and supersedes all prior agreements, understandings, negotiations and discussions, whether oral or written.
10.	This Agreement shall be governed by and construed in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable therein and shall be treated, in all respects, as an Ontario contract.
11.	This Agreement may be executed by the parties in separate counterparts (by original, facsimile signature or other means of electronic transmission) each of which when so executed and delivered shall be deemed to be an original, and all such counterparts shall together be construed as one and the same instrument. The signature of either of the parties hereto may be evidenced by a facsimile, scanned email or internet transmission copy of this Agreement bearing such signature.

[Remainder of Page Intentionally Left Blank]

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If you find the foregoing acceptable, please execute the enclosed copy of this letter and return a copy of it to the undersigned.

Yours very truly,

SPHERE 3D CORPORATION

Per: “X. Xxxxx Xxxxxxxxxxx”
Name: X. Xxxxx Xxxxxxxxxxx
Title: Chief Financial Officer/Secretary

The undersigned hereby acknowledges and agrees to be bound by the foregoing this 15^th day of July, 2013.

“Xxxx X. Xxxxx”
XXXX X. XXXXX