Sphere 3D Corp. - Capital/Financing Update 2014

CORRESP 1 filename1.htm Sphere 3D Corporation - SEC Correspondence - Filed by newsfilecorp.com

RICHARD RAYMER Partner DIRECT: 416-367-7388 FAX: 416-367-7371 [email protected]

July 2, 2014

VIA EDGAR

Paul Dudek Securities and Exchange Commission 100 F Street, NE Washington, D.C. 20549-7553

Re: Sphere 3D Corporation Form 40-F Registration Statement

Ladies and Gentlemen:

As requested, on behalf of Sphere 3D Corporation (the Company ), please find below additional information regarding the Companys private placement of units (the Units ) that closed on November 12, 2013 and the Companys private placement of special warrants (the Special Warrants ) that closed on June 5, 2014. The Company is an Ontario corporation and satisfies the definition of foreign private issuer as defined in Rule 405 of the United States Securities Act of 1933, as amended (the U.S. Securities Act ).

The November Placement

On November 12, 2013, the Company closed a private placement of Units in Canada, in accordance with Regulation S under U.S. Securities Act, and concurrently sold Units in the United States (the November U.S. Private Placement ) on a private placement basis to a single United States institutional accredited investor (the November U.S. Purchaser ). The November U.S. Private Placement was conducted in compliance with Rule 506(b) of Regulation D under the U.S. Securities Act. Each Unit consisted of one common share of the Company (the Common Shares ) and one-half of one Common Share purchase warrant to acquire one additional Common Share (each whole Common Share purchase warrant, a Warrant and collectively with the Common Shares underlying the Warrants, and the Common Shares, the November Securities ).

The Common Shares and the Warrants issued to the November U.S. Purchaser, are restricted securities within the meaning of Rule 144(a)(3) of the U.S. Securities Act, and were issued on a certificated basis with customary United States restrictive legends affixed thereto.

The Subscription Agreement used in connection with the offer and sale of the Units, attached hereto as Exhibit A (the November Subscription Agreement ), along with the United States Subscribers Representation Letter, included as Schedule C to the November Subscription Agreement, contain representations and warranties of the Company and of the subscriber, regarding compliance with Rule 506(b) and setting forth the resale restrictions applicable to the November Securities acquired by the November U.S. Purchaser. These restrictions include the requirement to have a United States restrictive legend affixed to the November Securities issued to the November U.S. Purchaser, which legend restricts the transfer of the November Securities and the exercise of the Warrants unless registered under the U.S. Securities Act or an exemption from the registration requirements of the U.S. Securities Act, and applicable state securities laws, is available.

July 2, 2014 Page 2

The June Placement

On June 5, 2014, the Company closed a private placement of Special Warrants in Canada, in accordance with Regulation S under the U.S. Securities Act, and concurrently issued Special Warrants in the United States (the June U.S. Private Placement ) on a private placement basis to a single institutional accredited investor (the June U.S. Purchaser ). The June U.S. Private Placement was conducted in compliance with Rule 506(b) of Regulation D under the U.S. Securities Act.

The Special Warrants issued to the June U.S. Purchaser, are restricted securities within the meaning of Rule 144(a)(3) of the U.S. Securities Act, and were issued on a certificated basis with customary United States restrictive legends affixed thereto.

Each Special Warrant will be automatically exercised into one common share and one-half common share purchase warrant (which along with the common shares issuable upon exercise of common share purchase warrants are referred to collectively as the June Securities ). Exercise of the Special Warrants shall occur on the third business day following effectiveness of a prospectus filed with Canadian securities regulators (the Canadian Prospectus ), which shall register for resale in Canada the securities underlying the Special Warrants. The automatic exercise of Special Warrants shall occur with no action of the holder, nor payment of additional consideration.

The Subscription Agreement for the Special Warrants, attached hereto as Exhibit B (the June Subscription Agreement ), and the United States Subscribers Representation Letter, included as Schedule C to the June Subscription Agreement, contain representations and warranties of the Company and of the subscriber, regarding compliance with Rule 506(b) and setting forth the resale restrictions applicable to the June Securities acquired by the June U.S. Purchaser. These restrictions include the requirement to have a United States restrictive legend affixed to the June Securities issued to the June U.S. Purchaser, which restricts the transfer of the June Securities and the exercise of the warrants underlying the June Securities unless registered under the U.S. Securities Act or an exemption from the registration requirements of the U.S. Securities Act and applicable state securities laws is available. In addition, a special warrant indenture, entered into by and between the Company and its transfer agent, which governs among other things the transfer of Special Warrants, prohibits the transfer of any outstanding Special Warrants to or for the account of a U.S. Person (as defined in Rule 902 of Regulation S), unless expressly agreed to by the Company and an opinion of counsel is delivered.

The Canadian Prospectus is expected to be filed with certain Canadian securities regulators, including Ontario, in the coming weeks. The Plan of Distribution of the Canadian Prospectus will contain language setting forth that the June Securities issued in the June U.S. Private Placement have not been registered under the U.S. Securities Act or applicable state securities laws and that they may not be offered or sold in the United States or to or for the account or benefit of a U.S. Person unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration requirements is available.

July 2, 2014 Page 3

Please feel free to contact the undersigned at (416) 367-7388 if you require any additional information or have any questions.

Sincerely,

DORSEY & WHITNEY LLP

Per: /s/ Richard Raymer Richard Raymer Partner

Exhibit A

SUBSCRIPTION FOR UNITS

| TO: | S PHERE 3D
C ORPORATION (the Corporation) |
| --- | --- |
| AND TO: | C ORMARK S ECURITIES I NC ., P ARADIGM C APITAL I NC . AND J ACOB S ECURITIES I NC .
(collectively, the Underwriters) |
| AND TO: | THE U.S.
A FFILIATES (as defined herein) |

The undersigned (hereinafter referred to as the Subscriber ) hereby irrevocably subscribes for and agrees to purchase from the Corporation the number of units of the Corporation (the Units ) set forth below for the aggregate subscription price set forth below, representing a subscription price of Cdn.$3.35 per Unit, upon and subject to the terms and conditions set forth in this Subscription Agreement, including the attached Terms and Conditions of Subscription, the applicable schedules attached hereto and the Term Sheet attached hereto as Schedule A (the Term Sheet ). Each Unit consists of one common share in the capital of the Corporation (a Common Share ) and one-half of one Common Share purchase warrant (each whole Common Share purchase warrant, a Warrant ). Each Warrant will entitle the holder thereof to acquire one additional Common Share (a Warrant Share ) at a price of Cdn.$4.50 at any time prior to 5:00 p.m. (Toronto time) on the date (the Expiry Date ) that is 24 months following the Closing Date (as defined herein). Commencing on the Closing Date, in the event that the Common Shares trade on the TSX Venture Exchange (the TSXV ) (or other principal exchange or market where the Common Shares are listed or quoted for trading) at a trading price of $6.00 or more for a period of at least ten (10) consecutive trading days, the Corporation shall be entitled to accelerate the exercise period to a period ending not less than twenty (20) trading days from the date notice of such acceleration is provided to the holders of Warrants (the Forced Conversion ). In addition to this face page, the Subscriber must also complete all applicable schedules attached hereto.

SUBSCRIPTION AND SUBSCRIBER INFORMATION

Please print all information (other than signatures), as applicable, in the space provided below.

| | Number of Units:
______x Cdn.$3.35 |
| --- | --- |
| (Name of Subscriber) | |
| | = |
| Account Reference (if applicable):
____ | |
| | Aggregate Subscription Price:
_____ |
| By: __________ | |
| | Please complete if purchasing as agent or
trustee for a principal (beneficial purchaser) |
| (Official Capacity or Title if the Subscriber is not an
individual) | (a Disclosed Principal) and not purchasing as
agent or trustee for accounts fully |
| | managed by it: |
| (Name of individual whose signature appears above if different
than the | |
| name
of the Subscriber printed above.) | |
| | (Name of Disclosed Principal) |
| (Subscribers Residential Address, including Province/State and
) | |
| Postal/ZIP
Code | |
| | (Disclosed Principals Residential Address
including Province/State and Postal/ZIP Code) |
| (Telephone Number) | |
| (E-mail
Address) | (Disclosed Principals Telephone
Number) |
| Account Registration Information: | Delivery Instructions as set forth below: |
| | [ ] Same address as account
registration, or |
| (Name) | |
| (Account
Reference, if applicable) | (Name) |
| (Address, including Postal Code) | (Account Reference, if applicable) |

Number and kind of securities of the Corporation held, if any:
(Address including Province/State and Postal/ZIP
Code)
(Contact Name)

ACCEPTANCE

The Corporation hereby accepts the subscription as set forth above on the terms and conditions contained in this Subscription Agreement.

Dated as of the ____ day of November, 2013.

SPHERE 3D CORPORATION

by:
Authorized Signing Officer

SPHERE 3D CORPORATION

SUBSCRIPTION FOR UNITS

INSTRUCTIONS

PLEASE MAKE SURE THAT YOUR SUBSCRIPTION INCLUDES:

| 1. | all Subscribers : a completed and signed copy of
the face page of this Subscription Agreement. |
| --- | --- |
| 2. | all Subscribers : payment by certified cheque,
money order, bank draft or other acceptable means in the amount of the
Aggregate Subscription Price payable to one of the Underwriters. |
| 3. | Subscribers resident in Canada : a completed and
signed copy of the Subscriber Certificate attached hereto as Schedule
B . |
| 4. | Subscribers who are, or are subscribing for the
account or benefit of, persons in the United States or U.S. Persons: a
completed and signed copy of the United States Subscribers Representation
Letter attached hereto as Schedule C . |
| 5. | all Subscribers : a completed and signed copy of
the TSXV Subscriber Information Sheet attached hereto as Schedule D,
including a completed and signed copy of Appendix A thereto, if
applicable. |

PROCEDURE AND DELIVERY:

Subscription forms should be completed, signed and delivered with payment, by no later than 4:00 p.m. (Toronto time) on Tuesday, November 5, 2013 (or such other time, date or place as the Subscriber may be advised), to:

Cormark Securities Inc. Royal Bank Plaza, South Tower 200 Bay Street, Suite 2800 Toronto, ON M5J 2J2

Attention: Christine Dolap Fax: 416.943.6496 Email: [email protected]

TERMS AND CONDITIONS OF SUBSCRIPTION

UNITS OF SPHERE 3D CORPORATION

The Subscriber understands that the Underwriters have agreed to purchase 1,250,000 Units from the Corporation for aggregate gross proceeds of $4,187,500 with the right to substitute purchasers to eligible investors (the Offering ). Each Unit will consist of one Common Share and one-half of one Warrant. Upon the terms and subject to the conditions contained in the Warrant Indenture (as defined herein) or Warrant Certificate (as defined herein), as applicable, and subject to the Forced Conversion right, each Warrant will entitle the holder thereof to acquire one Warrant Share at a price of Cdn.$6.00 until 5:00 p.m. (Toronto time) on the Expiry Date. The Units, the Common Shares forming part of the Units, the Warrants and the Warrant Shares are collectively referred to as the Securities . All Units sold for the account or benefit of, a person in the United States or U.S. Persons, if any, in accordance with Rule 506(b) of Regulation D under the U.S. Securities Act shall be sold directly to such persons as substituted purchasers by the Corporation in accordance with Schedule C of this Subscription Agreement.

1.
(a)	$ means Canadian dollars;
(b)	Aggregate Subscription Price means the aggregate
dollar amount of the subscription under this Subscription Agreement as set
out on the face page hereof;
(c)	business day means a day other than a Saturday,
Sunday or any other day on which the principal chartered banks located in
Toronto, Ontario are not open for business;
(d)	Canadian Offering Jurisdictions means each of
the provinces and territories of Canada;
(e)	Canadian Securities Laws means, as applicable,
the securities laws and regulations in each of the Canadian Offering
Jurisdictions, all written instruments, rules and orders having the force
of law of the securities regulators or regulatory authorities in each of
the Canadian Offering Jurisdictions and the rules of the TSXV;
(f)	Closing has the meaning ascribed to such term in
Section 4;
(g)	Closing Date means November 12, 2013 or such
other date as the Corporation and the Underwriters may agree;
(h)	Closing Time means 10:00 a.m. (Toronto time) on
the Closing Date or such other time as the Corporation and the
Underwriters may agree;
(i)	Common Shares means common shares in the capital
of the Corporation;
(j)	Compensation Options has the meaning ascribed to
such term in Section 11;
(k)	control person means a person, company or
combination of persons or companies described in the provisions of
securities legislation listed in Appendix A to National Instrument 45-102

	Resale of Securities ;
(l)	Corporation means Sphere 3D Corporation, a
corporation existing under the Business Corporations Act (Ontario)
and includes any successor corporation;
(m)	Disclosed Principal has the meaning ascribed to
such term on the face page of this Subscription Agreement;
(n)	Expiry Date has the meaning ascribed to such
term on the face page of this Subscription
Agreement;

| (o) | International Jurisdiction has the meaning
ascribed to such term in clause 8(p); |
| --- | --- |
| (p) | Lead Underwriter means Cormark Securities
Inc.; |
| (q) | NI 45-106 means National Instrument 45-106 Prospectus and Registration Exemptions of the Canadian Securities
Administrators; |
| (r) | Notice has the meaning ascribed to such term on
the face page of this Subscription Agreement; |
| (s) | Offering has the meaning ascribed to it in the
preamble to the Terms and Conditions of Subscription; |
| (t) | PCMLTFA has the meaning ascribed to such term in
clause 8(bb); |
| (u) | person means any individual (whether acting as
an executor, trustee, administrator, legal representative or otherwise),
corporation, firm, partnership, sole proprietorship, syndicate, joint
venture, trustee, trust, fund, unincorporated organization or association,
a government or an agency or political subdivision thereof and every other
form of legal or business entity of whatsoever nature or kind, and
pronouns have a similar extended meaning; |
| (v) | Regulation D means Regulation D under the U.S.
Securities Act; |
| (w) | Regulation S means Regulation S under the U.S.
Securities Act; |
| (x) | Securities has the meaning ascribed to such term
in the preamble to the Terms and Conditions of Subscription; |
| (y) | Securities Laws means, collectively, the
Canadian Securities Laws and the U.S. Securities Laws; |
| (z) | Subscriber means the subscriber for Units as set
out on the face page of this Subscription Agreement and includes, as
applicable, the Disclosed Principal unless the context otherwise
requires; |
| (aa) | Subscription Agreement means this subscription
agreement (including any schedules hereto) and any instrument amending
this Subscription Agreement; hereof , hereto ,
hereunder , herein and similar expressions mean and refer
to this Subscription Agreement and not to a particular Section or clause;
and the expression Section or clause followed by a
number or letter means and refers to the specified Section or clause of
this Subscription Agreement; |
| (bb) | TSXV means the TSX Venture Exchange; |
| (cc) | TSXV Approval means the conditional acceptance
of the Offering by the TSXV; |
| (dd) | Underwriting Agreement means the underwriting
agreement to be entered into between the Underwriters and the Corporation
in respect of the Offering; |
| (ee) | Underwriters means, collectively, Cormark
Securities Inc., Paradigm Securities Inc. and Jacob Securities
Inc.; |
| (ff) | United States means the United States of
America, its territories and possessions, any State of the United States
and the District of Columbia; |
| (gg) | Units has the meaning ascribed to such term on
the face page of this Subscription Agreement; |

| (hh) | U.S. Affiliate means the U.S. registered
broker-dealer affiliate of the Underwriters; |
| --- | --- |
| (ii) | U.S. Accredited Investor means an institutional
accredited investor who satisfies one or more of the criteria of Rule
501(a)(1), (2), (3) or (7) of Regulation D under the U.S. Securities
Act; |
| (jj) | U.S. Person means a U.S. person as defined in
Rule 902(k) of Regulation S; |
| (kk) | U.S. Securities Act means the United States
Securities Act of 1933 , as amended; |
| (ll) | U.S. Securities Laws means the U.S. Securities
Act, the United States Exchange Act of 1934, as amended, and all rules and
regulations promulgated thereunder and the applicable securities (blue
sky) laws of the states of the United States; |
| (mm) | Warrant Certificate means the form of common
share purchase warrant certificate to be issued by the Corporation to
evidence the Warrants; |
| (nn) | Warrant Indenture means the indenture to be
entered into between the Corporation and TMX Equity Transfer Services
Inc., as trustee, governing the terms and conditions of the
Warrants; |
| (oo) | Warrant Shares has the meaning ascribed to such
term on the face page of this Subscription Agreement; and |
| (pp) | Warrants has the meaning ascribed to such term
on the face page of this Subscription Agreement. |

For greater certainty, the parties hereby acknowledge and agree that, if the Subscriber is acting as agent or trustee on behalf of a Disclosed Principal, the words Subscriber, it and its, whenever used in relation to representations, warranties, acknowledgements, covenants or indemnities (including in Sections 8 to 11) mean the Subscriber and, unless the context otherwise requires, the Disclosed Principal.

2. Subscription. The Subscriber hereby confirms its irrevocable subscription for the Units from the Corporation, on and subject to the terms and conditions set out in this Subscription Agreement and in the Underwriting Agreement, for the Aggregate Subscription Price which is payable as described herein. The Subscriber acknowledges (on its own behalf and, if applicable, on behalf of each Disclosed Principal) that upon acceptance by the Corporation of this Subscription Agreement, this Subscription Agreement will constitute a binding obligation of the Subscriber (including, if applicable, each Disclosed Principal) subject to the terms and conditions contained herein.

3. Partial Acceptance or Rejection of Subscription. The Corporation may, in its absolute discretion, accept or reject the Subscribers subscription for Units as set forth in this Subscription Agreement, in whole or in part, and the Corporation reserves the right to allot to the Subscriber less than the amount of Units subscribed for under this Subscription Agreement. The Subscriber acknowledges and agrees that the acceptance of this Subscription Agreement will be conditional upon, among other things, the sale of the Units to the Subscriber being exempt from any prospectus and offering memorandum requirements of applicable Securities Laws and the equivalent provisions of securities laws of any other applicable jurisdiction and, to the extent possible, the Subscriber agrees to furnish the Corporation with all information that is reasonably necessary to confirm same.

If this Subscription Agreement is rejected in whole, any certified cheque, money order, bank draft or other form of payment delivered by the Subscriber to the Corporation on account of the Aggregate Subscription Price for the Units subscribed for will be promptly returned to the Subscriber without any interest paid on such amount. If this Subscription Agreement is accepted only in part, payment representing the amount by which the payment delivered by the Subscriber to the Corporation exceeds the subscription price of the number of Units sold to the Subscriber pursuant to a partial acceptance of this Subscription Agreement will be promptly delivered to the Subscriber without any interest paid on such amount.

4. Closing. Delivery of the certificates representing the Common Shares forming part of the Units and Warrant Certificates and payment of the Aggregate Subscription Price will be completed concurrently (the Closing ) at the offices of counsel to the Corporation at the Closing Time on the Closing Date or at such other time and place as the Corporation and the Underwriters may agree. If, prior to the Closing Time, the terms and conditions contained in this Subscription Agreement and the Underwriting Agreement have been complied with to the satisfaction of the Underwriters, acting reasonably, or waived by the Underwriters, the Underwriters shall deliver to the Corporation all completed Subscription Agreements, including this Subscription Agreement, and payment of the Aggregate Subscription Price for all of the Units sold pursuant to the Underwriting Agreement against delivery by the Corporation of certificates representing the Common Shares forming part of the Units and the Warrant Certificates and such other documentation as may be required pursuant to this Subscription Agreement and the Underwriting Agreement.

5. Conditions of Closing. The obligations of the parties hereunder are subject to all required regulatory approvals being obtained. This Offering is conditional upon, among other things, the Corporation obtaining TSXV Approval.

The Subscriber acknowledges and agrees that the obligations of the Corporation hereunder are conditional on the accuracy of the representations and warranties of the Subscriber contained in this Subscription Agreement as of the date of this Subscription Agreement, and as of the Closing Time as if made at and as of the Closing Time, and the fulfillment of the following additional conditions as soon as possible and in any event not later than the Closing Time:

| (a) | the Corporation having accepted this Subscription
Agreement; |
| --- | --- |
| (b) | payment by the Subscriber of the Aggregate Subscription
Price by certified cheque, money order, bank draft or other acceptable
means in Canadian dollars payable to one of the Underwriters; |
| (c) | the Subscriber having properly completed, signed and
delivered this Subscription Agreement and all applicable schedules (with
payment) to: |

Cormark Securities Inc. Royal Bank Plaza, South Tower 200 Bay Street, Suite 2800 Toronto, ON M5J 2J2

Attention: Christine Dolap Fax: 416.943.6496 Email: [email protected]

| (d) | if the Subscriber is resident in Canada, the Subscriber
having properly completed, signed and delivered Schedule B; |
| --- | --- |
| (e) | if the Subscriber is, or is subscribing for the account
or benefit of, a person in the United States or a U.S. Person, the
Subscriber having properly completed, signed and delivered Schedule
C; |
| (f) | the Subscriber having properly completed, signed and
delivered Schedule D, including a completed and signed copy of Appendix A
thereto, if applicable; and |
| (g) | the conditions of closing contained in the Underwriting
Agreement having been satisfied or waived by the relevant
party. |

6. Authorization of the Underwriters. The Subscriber irrevocably authorizes the Lead Underwriter, in its discretion, to act as the Subscribers representative at the Closing, and hereby appoints the Lead Underwriter, with full power of substitution, as its true and lawful attorney with full power and authority in the Subscribers place and stead:

| (a) | to receive certificates representing the Common Shares
forming part of the Units and the Warrant Certificates, to execute on
behalf of the Subscriber all closing receipts and required documents, to
complete and correct any errors or omissions in any form or document
provided by the Subscriber in connection with the subscription for the
Units hereunder, to approve any opinion, certificate or other document
addressed to the Subscriber and to exercise any rights of termination
contained in the Underwriting Agreement; |
| --- | --- |
| (b) | to extend such time periods and to waive, in whole or in
part, any representations, warranties, covenants or conditions for the
benefit of the Subscriber contained in this Subscription Agreement and in
the Underwriting Agreement (or any ancillary or related document) that, in
the opinion of the Lead Underwriter, is not prejudicial to the interests
of the Subscriber; |
| (c) | to terminate or not deliver this Subscription Agreement
if any condition precedent is not satisfied, in such manner and on such
terms and conditions as the Lead Underwriter in its sole discretion may
determine; and |
| (d) | without limiting the generality of the foregoing, to
negotiate, settle, execute, deliver and amend, as the case may be, the
Underwriting Agreement. |

The Subscriber agrees that this power of attorney is irrevocable, is coupled with an interest and has been given for valuable consideration, the receipt and adequacy of which are acknowledged. This power of attorney and other rights and privileges granted under this section will survive any legal or mental incapacity, dissolution, bankruptcy or death of the Subscriber (including any Disclosed Principal). This power of attorney extends to the heirs, executors, administrators, other legal representatives and successors, transferees and assigns of the Subscriber (including any Disclosed Principal). Any person dealing with the Underwriters may conclusively presume and rely upon the fact that any document, instrument or agreement executed by the Underwriters pursuant to this power of attorney is authorized and binding on the Subscriber (including any Disclosed Principal), without further inquiry. The Subscriber (including any Disclosed Principal) agrees to be bound by any representations or actions made or taken by the Underwriters pursuant to this power of attorney, and waives any and all defences that may be available to contest, negate or disaffirm any action of the Underwriters taken in good faith under this power of attorney.

7. Representations, Warranties and Covenants of the Corporation. By execution of this Subscription Agreement, the Corporation hereby agrees with the Subscriber that the Subscriber shall have the benefit of the representations, warranties and covenants made by the Corporation to the Underwriters as set forth in the Underwriting Agreement, except as amended or waived by the Underwriters, as though the Subscriber were a party thereto. Such representations, warranties and covenants shall form an integral part of this Subscription Agreement and shall survive the closing of the purchase and sale of the Units and shall continue in full force and effect for the benefit of the Subscriber in accordance with the Underwriting Agreement.

8. Representations, Warranties, Covenants and Acknowledgements of the Subscriber. By executing this Subscription Agreement, the Subscriber (on its own behalf and, including if applicable, on behalf of each Disclosed Principal) represents, warrants, covenants and acknowledges to and with the Corporation, the Underwriters and the U.S. Affiliates (and acknowledges and agrees that the Corporation, the Underwriters, the U.S. Affiliates and their respective legal counsel are relying thereon) that:

Authorization and Effectiveness

| (a) | if the Subscriber is an individual, the Subscriber is of
the full age of majority in the jurisdiction in which this Subscription
Agreement is executed and is legally competent to execute, deliver and be
bound by this Subscription Agreement, to perform all of its obligations
hereunder and to undertake all actions required of the Subscriber
hereunder; |
| --- | --- |
| (b) | if the Subscriber is not an individual, the Subscriber
has the requisite power, authority, legal capacity and competence to
execute, deliver and be bound by this Subscription Agreement, to perform
all of its obligations hereunder and to undertake all actions required of
the Subscriber hereunder, all necessary approvals of its directors,
partners, shareholders, trustees or otherwise with respect to such matters have been given or obtained
and the individual signing this Subscription Agreement has been duly
authorized; |

| (c) | if the Subscriber is a body corporate, the Subscriber is
incorporated and validly subsisting under the laws of its jurisdiction of
incorporation; |
| --- | --- |
| (d) | if the Subscriber is acting as principal, this
Subscription Agreement has been duly and validly authorized, executed and
delivered by the Subscriber and, when accepted by the Corporation, will
constitute a legal, valid and binding obligation enforceable against the
Subscriber in accordance with the terms hereof (subject to bankruptcy,
insolvency and other laws limiting the enforceability of creditors rights
and subject to the qualification that equitable remedies may only be
granted in the discretion of a court of competent jurisdiction); |
| (e) | if the Subscriber is acting as agent or trustee
(including, for greater certainty, a portfolio manager or comparable
adviser) for a principal, the Subscriber is duly authorized to execute and
deliver this Subscription Agreement and all other necessary documents in
connection with such subscription on behalf of such principal, each of
whom is subscribing as principal for its own account and not for the
benefit of any other person, and this Subscription Agreement has been duly
and validly authorized, executed and delivered by or on behalf of, and,
when accepted by the Corporation, will constitute a legal, valid and
binding obligation enforceable in accordance with the terms hereof
(subject to bankruptcy, insolvency and other laws limiting the
enforceability of creditors rights and subject to the qualification that
equitable remedies may only be granted in the discretion of a court of
competent jurisdiction) against, such principal; |
| (f) | the execution and delivery of this Subscription
Agreement, the performance and compliance with the terms hereof, the
subscription for the Units and the completion of the transactions
contemplated hereby will not result in any material breach of, or be in
conflict with or constitute a material default under, or create a state of
facts which, after notice or lapse of time, or both, would constitute a
material default under any term or provision of the constating documents,
by-laws or resolutions of the Subscriber or a Disclosed Principal (if not
an individual), the Securities Laws or any other applicable law, any
agreement to which the Subscriber or a Disclosed Principal is a party or
any applicable regulation, judgment, decree, order or ruling; |
| (g) | the Subscriber is not a person created or used solely to
purchase or hold securities in order to comply with or rely upon an
exemption from the prospectus requirements of applicable Securities Laws
and except as disclosed in writing to the Corporation, the Subscriber does
not act jointly or in concert with any other person or company for the
purposes of acquiring securities of the
Corporation; |

Disclosure if Purchasing as Underwriters or Trustee

(h) if the Subscriber is not subscribing as principal, the Subscriber acknowledges that the Corporation and/or the Underwriters may be required by law to disclose to applicable securities regulatory authorities or stock exchanges information concerning the identities of each beneficial purchaser for whom the Subscriber is acting hereunder;

Residence

(i) the Subscriber and, if applicable, each Disclosed Principal are resident, or if not an individual, has a head office, in the jurisdiction indicated on the face page of this Subscription Agreement as the Subscribers Residential Address and the Disclosed Principals Residential Address, respectively, such address was not created and is not used solely for the purpose of acquiring Units. The purchase by and sale to the Subscriber of the Units, and any act, solicitation, conduct or negotiation directly or indirectly in furtherance of such purchase or sale (whether with or with respect to the Subscriber or any Disclosed Principal) has occurred only in such jurisdiction;

Canadian Subscribers

| (j) | if the Subscriber is resident in Canada, the Subscriber
(or if applicable, the Disclosed Principal) is eligible to purchase the
Units pursuant to an exemption from the prospectus requirements of the
Canadian Securities Laws, and the Subscriber has completed, executed and
delivered to the Corporation a Subscriber Certificate in the form attached
hereto as Schedule B indicating that the Subscriber (or if applicable, the
Disclosed Principal) fits within one of the prospectus exemption
categories under applicable Canadian Securities Laws as set forth therein,
and confirms the truth and accuracy of all representations, warranties and
covenants made in such certificate as of the date of this Subscription
Agreement and as of the Closing Time; | |
| --- | --- | --- |
| (k) | the Subscriber (or if applicable, the Disclosed
Principal) acknowledges that: | |
| | (i) | no securities commission or similar regulatory authority
has reviewed or passed on the merits of the Securities; |
| | (ii) | there is no government or other insurance covering the
Securities; |
| | (iii) | there are risks associated with the purchase of the
Securities; |
| | (iv) | there are restrictions on the Subscribers ability to
resell the Securities and it is the responsibility of the Subscriber to
find out what those restrictions are and to comply with them before
selling the Securities; and |
| | (v) | the Corporation has advised the Subscriber that the
Corporation is relying on an exemption from the requirements to provide
the Subscriber with a prospectus and to sell securities through a person
registered to sell securities under the Canadian Securities Laws and, as a
consequence of acquiring Securities pursuant to this exemption, certain
protections, rights and remedies provided by the Canadian Securities Laws,
including statutory rights of rescission or damages, will not be available
to the Subscriber; |

U.S. Subscribers

| (l) | if the Subscriber is, or is subscribing for the account
or benefit of, a person in the United States or a U.S. Person, the
Subscriber (or any beneficial purchaser) is aware that the Securities have
not been and will not be registered under the U.S. Securities Act or the
securities laws of any state and the Units may not be offered or sold,
directly or indirectly, in the United States without registration under
the U.S. Securities Act or compliance with requirements of an exemption
from registration and it acknowledges that the Corporation has no present
intention of filing a registration statement under the U.S. Securities Act
in respect of the Securities; |
| --- | --- |
| (m) | if the Subscriber is, or is subscribing for the account
or benefit of, a person in the United States or a U.S. Person, the
Subscriber agrees to the additional terms included in Schedule C
hereto; |
| (n) | if the Subscriber is, or is subscribing for the account
or benefit of, a person in the United States or a U.S. Person, the
Subscriber (and, if applicable, such beneficial purchaser) is a U.S.
Accredited Investor purchasing the Units directly from the Corporation and
the Subscriber has completed Schedule C hereto and identified in Schedule
C the appropriate category of U.S. Accredited Investor that correctly and
in all respects describes the Subscriber (and, if applicable, such
beneficial purchaser); |

Non-U.S. Subscribers

(o) unless the Subscriber is, or is subscribing for the account or benefit of, a person in the United States or a U.S. Person and the Subscriber has completed and delivered Schedule C hereto (in which case the Subscriber makes the representations, warranties and covenants therein), the Subscriber acknowledges and agrees that:

| (i) | the Units have not been offered to the Subscriber or any
beneficial purchaser for whom it is acting while the Subscriber or such
beneficial person, if applicable, was in the United States, and the
individuals making the order to purchase the Units and executing and
delivering this Subscription Agreement for the account or benefit of the
Subscriber or such beneficial purchaser were not in the United States when
the order was placed or when this Subscription Agreement was executed and
delivered; |
| --- | --- |
| (ii) | the Subscriber is not in the United States or a U.S.
Person and is not purchasing the Units for the account or benefit of a
person in the United States or a U.S. Person; |
| (iii) | the Subscriber is not purchasing the Units as the result
of any directed selling efforts (as defined in Rule 902(c) of Regulation S
under the U.S. Securities Act and, including, but not limited to, any
press releases made by the Corporation relating to the proposed Offering
of the Units or any report, notification or summary of the same) made in
the United States by the Corporation, a distributor, any of their
respective affiliates, or any person acting on behalf of any of the
foregoing; |
| (iv) | the current structure of this transaction and all
transactions and activities contemplated hereunder is not a scheme to
avoid the registration requirements of the U.S. Securities Act;
and |
| (v) | the Subscriber or any beneficial purchaser for whom it is
acting, if applicable, has no intention to distribute either directly or
indirectly any of the Units in the United States, except in compliance
with the U.S. Securities Act and any applicable state securities
laws; |

International Subscribers

(p)
(i)	the Subscriber is not subject to Canadian Securities
Laws;
(ii)	the Subscriber is knowledgeable of, or has been
independently advised as to, the applicable securities laws of the
International Jurisdiction which would apply to this subscription, if
there are any;
(iii)	the Corporation is offering and selling the Units and the
Subscriber is purchasing the Units pursuant to exemptions from the
prospectus and registration requirements under the applicable securities
laws of the International Jurisdiction or, if such is not applicable, the
Corporation is permitted to offer and sell the Units and the Subscriber is
permitted to purchase the Units under the applicable securities laws of
such International Jurisdiction without the need to rely on
exemptions;
(iv)	the applicable securities laws of the International
Jurisdiction do not require the Corporation to prepare and/or file any
documents or be subject to ongoing reporting requirements or seek any
approvals of any kind whatsoever in respect of the offer and sale of the
Units to the Subscriber from any regulatory authority of any kind
whatsoever in the International Jurisdiction; and
(v)	the Subscriber will, if requested by the Corporation,
deliver to the Corporation a certificate or opinion of local counsel from
the International Jurisdiction which will confirm the matters referred to in
subparagraphs (iii) and (iv) above to the satisfaction of the Corporation,
acting reasonably;

10 -

No Prospectus or Undisclosed Information

(q)
(i)	the Subscriber may be restricted from using some of the
protections, rights and remedies otherwise available under Canadian
Securities Laws, including statutory rights of rescission or damages in
the event of a misrepresentation;
(ii)	the Subscriber may not receive information that would
otherwise be required to be provided to it under Canadian Securities Laws;
and
(iii)	the Corporation is relieved from certain obligations that
would otherwise apply under Canadian Securities
Laws;

| (r) | the Subscriber has not received or been provided with a
prospectus, registration statement or offering memorandum, within the
meaning of Securities Laws, or any sales or advertising literature in
connection with the Offering. The Subscribers decision to subscribe for
the Units was not based upon, and the Subscriber has not relied upon, any
verbal or written representations as to fact made by or on behalf of the
Corporation or the Underwriters and their respective directors, officers,
employees, agents and representatives. The Subscribers decision to
subscribe for the Units was based solely upon this Subscription Agreement,
including the Term Sheet attached hereto as Schedule A, and information
about the Corporation which is publicly available (any such information
having been obtained by the Subscriber without independent investigation
or verification by the Underwriters); |
| --- | --- |
| (s) | the Underwriters, its counsel, Heenan Blaikie LLP, and
counsel to the Corporation, Meretsky Law Firm, and their respective
directors, officers, employees, agents and representatives assume no
responsibility or liability of any nature whatsoever for the accuracy or
adequacy of any such publicly available information concerning the
Corporation or as to whether all information concerning the Corporation
that is required to be disclosed or filed by the Corporation under the
Securities Laws has been so disclosed or filed; |
| (t) | except for the Subscribers knowledge regarding its
subscription for Units hereunder, the Subscriber has no knowledge of a
material fact or a material change (as those terms are defined in
applicable Canadian Securities Laws) in the affairs of the Corporation
that has not been generally disclosed; |

Investment Suitability

(u)
(i)	has such knowledge in financial and business affairs as
to be capable of evaluating the merits and risks of its investment in the
Securities;
(ii)	is capable of assessing the proposed investment in the
Securities as a result of the Subscribers own experience or as a result
of advice received from a person registered under applicable Canadian
Securities Laws;

11 -

| (iii) | is aware of the characteristics of the Securities and the
risks relating to an investment therein; and |
| --- | --- |
| (iv) | is able to bear the economic risk of loss of its
investment in the Securities; |

(v) the Subscriber understands that no securities commission, stock exchange, governmental agency, regulatory body or similar authority has made any finding or determination or expressed any opinion with respect to the merits of investing in the Units nor is there any government or other insurance covering the Units;

No Representations

(w)
(i)	regarding the future value of the Securities;
(ii)	that any person will resell or repurchase the Securities;
or
(iii)	that any person will refund the purchase price of the
Securities other than as provided in this Subscription
Agreement;

Limitations on Resale

Legends

(y) the certificates representing the Common Shares forming part of the Units and the Warrant Certificates will bear a legend substantially in the following form:

UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE . and may also bear a legend substantially in the following form: WITHOUT PRIOR WRITTEN APPROVAL OF THE TSX VENTURE EXCHANGE AND COMPLIANCE WITH ALL APPLICABLE SECURITIES LEGISLATION, THE SECURITIES REPRESENTED BY OR UNDERLYING THIS CERTIFICATE MAY NOT BE SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE TRADED ON OR THROUGH THE FACILITIES OF THE TSX VENTURE EXCHANGE OR OTHERWISE IN CANADA OR TO OR FOR THE BENEFIT OF A CANADIAN RESIDENT UNTIL .

12 -

In addition to the foregoing legends, the certificates representing the Common Shares forming part of the Units and the Warrant Certificates issued to Subscribers who are, or are subscribing for the account or benefit of, persons in the United States or U.S. Persons, will also bear the legends described in Schedule C of this Subscription Agreement.

Restrictions on Warrant Exercise in the United States

(z) the Subscriber understands that the Warrants may not be exercised in the United States or by or on behalf of a U.S. Person unless an exemption is available from the registration requirements of the U. S. Securities Act and all applicable state securities laws and the holder has delivered to the Corporation a written opinion of counsel reasonably satisfactory to the Corporation to such effect; provided, however, that an original Subscriber in the Offering that is in the United States or a U.S. Person will not be required to deliver an opinion of counsel in connection with the exercise of Warrants purchased in the Offering by such original Subscriber that is in the United States or a U. S. Person, on its own behalf or on behalf of the original beneficial purchaser (if any), at a time when it and such beneficial purchaser (if any) are U.S. Accredited Investors;

No Purchase or Offer in the United States

(aa) unless the Subscriber is, or is subscribing for the account or benefit of, a person in the United States or a U.S. Person and has duly completed and executed Schedule C hereto, neither the Subscriber nor any person for whom it is acting will offer, sell or otherwise dispose of the Securities in the United States or to, or for the benefit or account of, a person in the United States or a U.S. Person, or exercise the Warrants in the United States, unless the Corporation has consented to such offer, sale, disposition or exercise and such offer, sale, disposition or exercise is made in accordance with an exemption from the registration requirements under the U.S. Securities Act and the securities laws of all applicable states of the United States or the Corporation has filed, and the U.S. Securities and Exchange Commission has declared effective, a registration statement in respect of such Securities;

Not Proceeds of Crime

(bb) the funds representing the Aggregate Subscription Price which will be advanced by the Subscriber hereunder will not represent proceeds of crime for the purposes of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada), as may be amended from time to time (the PCMLTFA ) and the Subscriber acknowledges that the Corporation may in the future be required by law to disclose the Subscribers name and other information relating to this Subscription Agreement and the Subscribers subscription hereunder, on a confidential basis, pursuant to the PCMLTFA. To the best of its knowledge: (i) none of the subscription funds to be provided by the Subscriber: (A) have been or will be derived from or related to any activity that is deemed criminal under the law of Canada, the United States, or any other jurisdiction; or (B) are being tendered on behalf of a person or entity who has not been identified to the Subscriber; and (ii) it shall promptly notify the Corporation if the Subscriber (including any Disclosed Principal) discovers that any of such representations cease to be true, and to provide the Corporation with appropriate information in connection therewith;

Personal Information

(cc)
(i)	(A) to conduct background checks, (B) to verify the
personal information that has been provided about each individual, (C) to
consider the suitability of the individual to act
as an insider of an issuer, (D) to provide disclosure to
market participants as to the security holdings of directors, officers,
other insiders and promoters of the issuer, or its associates or
affiliates, (E) to conduct enforcement proceedings, and (F) to perform
other investigations as required by and to ensure compliance with all
applicable rules, policies, rulings and regulations of the TSXV,
securities legislation and other legal and regulatory requirements
governing the conduct and protection of the public markets in
Canada;

13 -

| (ii) | as part of the above-mentioned process, the TSXV also
collects additional personal information from other sources, including but
not limited to, securities regulatory authorities in Canada or elsewhere,
investigative, law enforcement or self-regulatory organizations,
regulations services providers and each of their subsidiaries, affiliates,
regulators and authorized agents, to ensure that the purposes set out
above can be accomplished; and |
| --- | --- |
| (iii) | the personal information the TSXV collects may also be
disclosed: |

| (A) | to the agencies and organizations in the preceding
paragraph, or as otherwise permitted or required by law, and they may use
it in their own investigations for the purposes described above;
and |
| --- | --- |
| (B) | on the website of the TSXV or through printed materials
published by or pursuant to the directions of the
TSXV. |

No Financial Assistance

(dd) the Subscriber has not received and does not expect to receive any financial assistance from the Corporation directly or indirectly, in respect of the Subscribers purchase of the Units;

Future Financings

(ee) the Subscriber acknowledges that the Corporation may complete additional financings in the future to develop the proposed business of the Corporation and to fund its ongoing development. There is no assurance that such financings will be available and if available, will be on reasonable terms. Any such future financings may have a dilutive effect on current shareholders, including the Subscriber;

No Advertising

(ff) the Subscriber has not become aware of any advertisement in printed media of general and regular paid circulation or on radio, television or other form of telecommunication or any other form of advertisement (including electronic display or the Internet including but not limited to the Corporations website) or sales literature with respect to the distribution of the Units or any seminar or meeting whose attendees have been invited by general solicitation or general advertising;

No Other Fees

(gg) other than the Underwriters, the Subscriber confirms that there is no person acting or purporting to act on behalf of the Subscriber (including any Disclosed Principal), if applicable, in connection with the transactions contemplated herein who is entitled to any brokerage or finders fee. If any other person establishes a claim that any fee or other compensation is payable in connection with this subscription for the Units on account of the Subscribers subscription, the Subscriber covenants to indemnify and hold harmless the Corporation and the Underwriters with respect thereto and with respect to all costs reasonably incurred in the defence thereof;

14 -

Other Documents

(hh) if required by Securities Laws or by any securities commission, stock exchange or other regulatory authority, the Subscriber and, if applicable, each Disclosed Principal will execute, deliver, file and otherwise assist the Corporation and/or the Underwriters in filing, such reports, undertakings and other documents with respect to the subscription for and issuance of the Securities;

Subscribers Responsibility for Legal and Financial Advice

| (ii) | the Subscriber confirms that it and, if applicable, each
Disclosed Principal is responsible for obtaining its own legal, tax,
investment and other professional advice with respect to the execution,
delivery and performance by it of this Subscription Agreement and the
transactions contemplated hereunder including the suitability of the
Securities as an investment for the Subscriber and, if applicable, each
Disclosed Principal, the tax consequences of purchasing and dealing with
the Securities, and the resale restrictions and hold periods to which
the Securities are or may be subject under Securities Laws. The Subscriber
has not relied upon any statements made by or purporting to have been made
on behalf of the Corporation, the Underwriters or their respective counsel
with respect to such matters; |
| --- | --- |
| (jj) | the Subscriber acknowledges that the Corporations
counsel is acting solely as counsel to the Corporation and the
Underwriters counsel is acting solely as counsel to the Underwriters and,
in each case, not as counsel to the Subscriber or, if applicable, to any
Disclosed Principal; |

Registration

(kk) neither the Subscriber nor any Disclosed Purchaser is engaged in the business of trading in securities or exchange contracts as a principal or agent and does not hold himself, herself or itself out as engaging in the business of trading in securities or exchange contracts as a principal or agent, or is otherwise exempt from any requirements to be registered as a dealer under National Instrument 31-103 Registration Requirements and Exemptions; and

Not a Control Person

(ll) neither the Subscriber nor, if applicable, any Disclosed Principal will become a control person of the Corporation by virtue of its subscription for Units hereunder and neither the Subscriber nor, if applicable, any Disclosed Principal intends to act in concert with any other person or persons to form a control group of the Corporation.

9. Reliance on Representations, Warranties, Covenants and Acknowledgements. The Subscriber acknowledges and agrees that the representations, warranties, covenants and acknowledgements made by the Subscriber in this Subscription Agreement, including the schedules hereto, are made with the intention that they may be relied upon by the Corporation, the Underwriters, the U.S. Affiliate and their respective counsel in determining the Subscribers eligibility (and, if applicable, the eligibility of others for whom the Subscriber is contracting hereunder) to purchase the Units under the Securities Laws. The Subscriber further agrees that by accepting the Units, the Subscriber shall be representing and warranting that such representations, warranties, acknowledgements and covenants are true as at the Closing Time with the same force and effect for the benefit of the Corporation, the Underwriters and the U.S. Affiliate as if they had been made by the Subscriber at the Closing Time and that they shall survive the purchase by the Subscriber of the Units and shall continue in full force and effect for the benefit of the Corporation, the Underwriters and the U.S. Affiliate notwithstanding any subsequent disposition by the Subscriber of any of the Securities.

10. Indemnity. The Subscriber acknowledges that the Corporation, the Underwriters, the U.S. Affiliate and their respective counsel are relying upon the representations, warranties, acknowledgements and covenants of the Subscriber set forth herein (including the schedules attached hereto) in determining the eligibility (from a securities law perspective) of the Subscriber (or, if applicable, the eligibility of another on whose behalf the Subscriber is contracting hereunder to subscribe for Units) to purchase Units under the Offering, and hereby agrees to indemnify the Corporation, the Underwriters, the U.S. Affiliate and their respective directors, officers, employees, advisers, affiliates, shareholders, representatives and agents (including their respective legal counsel) against all losses, claims, costs, expenses, damages or liabilities that they may suffer or incur as a result of or in connection with their reliance on such representations, warranties, acknowledgements and covenants. The Subscriber undertakes to immediately notify the Corporation, the Underwriters and the U.S. Affiliate of any change in any statement or other information relating to the Subscriber set forth herein that occurs prior to the Closing Time. To the extent that any person entitled to be indemnified hereunder is not a party to this Subscription Agreement, the Corporation, the Underwriters and the U.S. Affiliate, as the case may be, shall obtain and hold the rights and benefits of this Subscription Agreement in trust for, and on behalf of, such person, and such person shall be entitled to enforce the provisions of this section notwithstanding that such person is not a party to this Subscription Agreement.

15 -

11. Underwriters Commissions. The Subscriber understands that in connection with the issue and sale of the Units pursuant to the Offering, the Underwriters will receive from the Corporation a commission equal to 6.0% of the gross proceeds received by the Corporation from the Offering. As additional compensation, the Corporation will issue to the Underwriters compensation options to purchase that number of Units of the Corporation equal to 8.0% of the total number of Units sold under the Offering at an exercise price of Cdn.$3.35 exercisable for a period of 24 months from the Closing Date.

No other fee or commission is payable by the Corporation in connection with the completion of the Offering. However, the Corporation will pay certain fees and expenses of the Underwriters in connection with the Offering as set out in the Underwriting Agreement.

12. Subscribers Costs. The Subscriber acknowledges and agrees that all costs incurred by the Subscriber (including any fees and disbursements of any counsel retained by the Subscriber) relating to the sale of the Units to the Subscriber shall be borne by the Subscriber.

13. Notices. Any notice, direction or other instrument required or permitted to be given to any party hereto shall be in writing and shall be sufficiently given if delivered personally or by courier or transmitted by facsimile or other form of electronic communication during the transmission of which no indication of failure of receipt is communicated to the sender and for which evidence of delivery is obtained, as follows:

(a) in the case of the Corporation, to:

Sphere 3D Corporation 240 Matheson Blvd. East Mississauga, ON L4Z 1X

Attention: Scott Worthington, CFO Facsimile: (905) 282-9966 Email: [email protected]

(b) in the case of the Subscriber, at the address and facsimile number specified on the face page hereof, with a copy to:

Cormark Securities Inc. Royal Bank Plaza, South Tower 200 Bay Street, Suite 2800 Toronto, ON M5J 2J2 Attention: Jeff Kennedy Fax: 416.943.6499 Email: [email protected]

or to such other address, facsimile number, email address or person that the party designates by notice given in accordance with the foregoing provisions. Any such notice: (i) if delivered personally or by courier, shall be deemed to have been given and received on the date of such delivery provided that if such day is not a business day then it shall be deemed to have been given and received on the first business day following such day; and (ii) if transmitted by facsimile or other form of electronic communication, shall be deemed to have been given on the date of transmission if sent before 5:00 p.m. on a business day or, if not before 5:00 p.m., on the first business day following the date of transmission provided that the sender has evidence of a successful transmission such as a fax confirmation or electronic delivery receipt.

16 -

14. Interpretation. The headings used in this Subscription Agreement have been inserted for convenience of reference only and shall not affect the meaning or interpretation of this Subscription Agreement or any provision hereof. Words importing the singular number only shall include the plural and vice versa. In this Subscription Agreement, unless otherwise indicated, all references to money amounts are to Canadian dollars.

15. No Partnership. Nothing herein shall constitute or be construed to constitute a partnership of any kind whatsoever between the Subscriber and the Corporation.

16. Governing Law. The contract arising out of acceptance of this Subscription Agreement by the Corporation shall be governed by and construed in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable therein. The parties irrevocably attorn to the jurisdiction of the courts of the Province of Ontario.

17. Time of Essence. Time shall be of the essence of this Subscription Agreement.

18. Entire Agreement. This Subscription Agreement represents the entire agreement of the parties hereto relating to the subject matter hereof, and there are no representations, covenants or other agreements relating to the subject matter hereof except as stated or referred to herein.

19. Electronic Copies. The Corporation shall be entitled to rely on delivery of a facsimile or portable document format ( pdf ) copy of executed subscriptions, and acceptance by the Corporation of such facsimile or pdf subscriptions shall be legally effective to create a valid and binding agreement between the Subscriber and the Corporation in accordance with the terms hereof.

20. Counterpart. This Subscription Agreement may be executed in one or more counterparts each of which so executed shall constitute an original and all of which together shall constitute one and the same agreement. Delivery of counterparts may be effected by facsimile or pdf transmission thereof.

21. Severability. The invalidity, illegality or unenforceability of any provision of this Subscription Agreement shall not affect the validity, legality or enforceability of any other provision hereof.

22. Enurement. This Subscription Agreement shall be binding upon and enure to the benefit of the parties hereto and their respective heirs, executors, administrators, successors (including any successor by reason of the amalgamation or merger of any party) and permitted assigns.

23. Assignment. Neither party may assign all or part of its interest in or to this Subscription Agreement without the consent of the other party in writing.

24. Amendment. Except as otherwise provided herein, this Subscription Agreement may only be amended by the parties hereto in writing.

25. Further Assurances. Each party hereto from time to time at the request of the other party hereto, whether before or after Closing Time, shall do such further acts and execute and deliver such further instruments, deeds and documents as shall be reasonably required in order to fully perform and carry out the provisions of this Subscription Agreement. The parties hereto agree to act honestly and in good faith in the performance of their respective obligations hereunder.

26. Language. The Subscriber acknowledges that it has consented to and requested that all documents evidencing or relating in any way to the sale of the Units be drawn up in the English language only. Le souscripteur reconnaît par les présentes avoir consenti et exigé que tous les documents faisant foi ou se rapportant de quelque manière à la vente des bons de unités soient rédigés en anglais seulement.

17 -

| COLLECTION OF PERSONAL INFORMATION |
| --- |
| This Subscription Agreement and the schedules hereto
require the Subscriber to provide certain personal information (respecting
the Subscriber and, if applicable, the beneficial purchaser for whom the
Subscriber is contracting) to the Corporation and the Underwriters.
(Personal information includes personal information as that term is
defined under applicable privacy legislation, including without
limitation, the Personal Information Protection and Electronic
Documents Act (Canada) and any other applicable similar replacement or
supplemental provincial or federal legislation or laws and the policies of
the TSXV in effect from time to time). Such information is being collected
for the purposes of completing the Offering, which includes, without
limitation, determining the eligibility of the Subscriber or, if
applicable, the beneficial purchaser for whom the Subscriber is
contracting, to purchase the Securities under applicable securities laws,
preparing and registering certificates representing the Securities to be
issued hereunder and completing filings required under applicable
Securities Laws or by any stock exchange, the Investment Industry
Regulatory Organization of Canada and/or securities regulatory
authorities. |
| In addition, such personal information may be used or
disclosed by the Corporation for the purpose of administering the
Corporations relationship with the Subscriber or, if applicable, the
beneficial purchaser for whom the Subscriber is contracting. For example,
such personal information may be used by the Corporation to communicate
with the Subscriber or, if applicable, the beneficial purchaser for whom
the Subscriber is contracting (such as by providing annual or quarterly
reports), to prepare tax filings and forms or to comply with its
obligations under taxation, securities and other laws (such as maintaining
a list of holders of shares). |
| In connection with the foregoing, the personal
information of the Subscriber or, if applicable, the beneficial purchaser
for whom the Subscriber is contracting, may be disclosed by the
Corporation or the Underwriters to: (i) any stock exchanges or securities
regulatory or taxation authorities; (ii) the Corporations registrar and
transfer agent (if applicable); and (iii) any of the other parties
involved in the Offering, including legal counsel, and may be included in
record books prepared in respect of the Offering. |
| By executing this Subscription Agreement, the Subscriber
(on its own behalf and, if applicable, on behalf of the beneficial
purchaser for whom the Subscriber is contracting) hereby consents to the
collection, use and disclosure of such personal information. The
Subscriber (on its own behalf and, if applicable, on behalf of the
beneficial purchaser for whom the Subscriber is contracting) also consents
to the filing of copies or originals of any of the documents provided to
the Corporation or the Underwriters by or on behalf of the Subscriber with
any securities regulatory authority in relation to the transactions
contemplated by this Subscription. |
| The Subscriber acknowledges that the Subscribers
personal information and the personal information of any Disclosed
Principal may be delivered to the Ontario Securities Commission and is
thereby being collected indirectly by the Ontario Securities Commission
under the authority granted to it in securities legislation for the
purposes of administration and enforcement of the securities legislation
of Ontario. The public official in Ontario who can answer questions about
the Ontario Securities Commissions indirect collection of personal
information is: Administrative Support Clerk to the Director of Corporate
Finance, Suite 1903, Box 5520, Queen Street West, Toronto, Ontario, M5H
3S8, Telephone (416) 593-3684. |

SCHEDULE A
TERM SHEET
SPHERE 3D CORPORATION

Issuer:	Sphere 3D Corporation (the Company ).
Offering:	Treasury offering of 1,250,000 units (the Issued
Units ). Each Issued Unit is comprised of one common share of the
Company (a Common Share ) and one-half of one common share
purchase warrant (each full warrant, a Warrant ) of the Company.
Warrant:	Each whole Warrant will entitle the holder thereof to
purchase one Common Share of the Company for a period of 24 months
following the Closing Date (as hereinafter defined) at a price of $4.50.
Forced Conversion:	The Warrants shall be subject to an acceleration clause
whereby in the event the Common Shares of the Company trade at $6.00 or
more for more than 10 consecutive trading days, the Company has the right
to force exercise of the Warrants by providing notice to the warrantholder
(the Forced Conversion ). The warrantholder will have 20 trading
days to exercise the Warrants or they will be forfeited.
Issue Price:	$3.35 per Issued Unit.
Gross Proceeds:	$4,187,500.
Use of Proceeds:	The net proceeds of the Offering will be used for sales
and marketing, and general corporate purposes.
Offering Jurisdictions:	Offered in each of the provinces of Canada, the United
States (pursuant to Rule 506(b) of Regulation D under the United States
Securities Act of 1933, as amended (the U.S. Securities
Act ) to a limited number of institutional accredited investors who
satisfy one or more of the criteria of Rule 501(a)(1), (2), (3) or (7) of
Regulation D under the U.S. Securities Act) and such other jurisdictions
as is reasonably agreed to by the Company provided that the Company is not
required to file a prospectus, registration statement or other similar
disclosure document or become subject to continuing reporting obligations
in such other jurisdictions.
Underwriting Basis:	Bought deal with conventional bought deal termination
provisions to be included in a definitive underwriting agreement.
Listing:	Application will be made to list the Common Shares
underlying the Issued Units on the TSX Venture Exchange (the
TSXV ). The existing common shares of the Company are listed on
the TSXV under the symbol ANY.
Eligibility:	Eligible for RRSPs, RRIFs, RESPs, DPSPs and TFSAs.
Compensation:	In consideration of the services to be rendered by the
Underwriters in connection with the Offering, the Company shall pay to the
Underwriters a cash commission equal to 6.0% of the gross proceeds of the Offering (the Cash
Commission ) and at Closing the Corporation shall issue to the
Underwriters broker warrants (the Broker Warrants ) exercisable to
acquire that number of Units as is equal to 8.0% of the aggregate number
of Issued Units sold pursuant to the Offering. Each Broker Warrant shall
entitle the holder thereof to acquire one Unit at the Offering Price for a
period of 24 months following the Closing.

A - 2

| Black-Out Period: | The Company agrees not to issue any common shares or
securities convertible into common shares for a period of 120 days from
the closing of the Offering without the prior written consent of Cormark
except in conjunction with: (i) the exercise of stock options; and (ii)
the exercise of outstanding warrants or convertible debt, in all cases
such consent not to be unreasonably withheld. |
| --- | --- |
| Hold Period: | Pursuant to National Instrument 45-102 Resale of
Securities ( NI 45-102 ), the Issued Shares will be subject to a
four month hold period in all of the Offering Jurisdictions, commencing on
Closing. A legend in the form prescribed by NI 45-102 or other
applicable securities legislation or stock exchange rules will appear on
the Issued Share certificates, together with such additional legends as
may be appropriate in the circumstances. |
| Closing Date: | On or before November 12, 2013. |

SCHEDULE B
NON-U.S.
SUBSCRIBER CERTIFICATE

TO:	S PHERE 3D C ORPORATION (the Corporation)
AND TO:	C ORMARK S ECURITIES I NC ., P ARADIGM C APITAL I NC . AND J ACOB S ECURITIES I NC .
	(collectively, the Underwriters)

Reference is made to the subscription agreement between the Corporation and the undersigned (referred to herein as the Subscriber ) dated as of the date hereof (the Subscription Agreement ). Upon execution of this Subscriber Certificate by the Subscriber, this Subscriber Certificate shall be incorporated into and form a part of the Subscription Agreement.

Terms not otherwise defined herein have the meanings attributed to them in the Subscription Agreement and in National Instrument 45-106 Prospectus and Registration Exemptions (NI 45-106) promulgated under applicable Canadian Securities Laws. All monetary references are in Canadian dollars.

In connection with the purchase of units ( Units ) of the Corporation by the Subscriber, the Subscriber represents, warrants and covenants (on its own behalf and, if applicable, on behalf of those for whom the Subscriber is contracting under the Subscription Agreement) and certifies to the Corporation and acknowledges that the Corporation is relying thereon that:

General

A.
(i)	the Subscriber is resident in or otherwise subject to the
laws of the jurisdiction set out as the Subscribers Residential Address
on the face page of the Subscription Agreement and is purchasing as
principal for its own account and not for the benefit of any other
person;
(ii)	the Subscriber is contracting hereunder on behalf of a
Disclosed Principal and such Disclosed Principal is resident in or
otherwise subject to the laws of the jurisdiction set out as the
Disclosed Principals Residential Address on the face page of the
Subscription Agreement and is purchasing as principal for its own account
and not for the benefit of any other person; or
(iii)	the Subscriber is deemed to be purchasing as principal
pursuant to NI 45-106 with respect to a purchase of the Units, by virtue
of the fact that it is a trust company or trust corporation described in
clause (p) of the definition of accredited investor in Section B below
and is not a trust company or trust corporation registered under the laws
of Prince Edward Island that is not registered or authorized under the Trust and Loan Companies Act (Canada) or under comparable
legislation in another jurisdiction of Canada, or by virtue of the fact
that it is a person or company described in clause (q) of the definition
of accredited investor in clause B below; and

Prospectus Exemptions

B.
(i)	the Subscriber or the Disclosed Principal, as applicable,
is, as of the date hereof, and will be, as of the Closing Date, an
accredited investor, as such term is defined in NI 45-106, by virtue of
the fact that the Subscriber or the Disclosed Principal, as applicable,
falls within one or more of the following categories checked
below :

| (a) | a Canadian financial institution, or a Schedule III
bank; | [ ] |
| --- | --- | --- |
| (b) | the Business Development Bank of Canada incorporated
under the Business Development Bank of Canada Act (Canada); | [ ] |
| (c) | a subsidiary of any person referred to in paragraphs (a)
or (b), if the person owns all of the | [ ] |

| (d) | voting securities of the subsidiary, except the voting
securities required by law to be owned by directors of that subsidiary; — a person registered under the securities legislation of a
jurisdiction of Canada as an adviser or dealer, other than a person
registered solely as a limited market dealer under one or both of the Securities Act (Ontario) or the Securities Act (Newfoundland
and Labrador); | [ ] |
| --- | --- | --- |
| (e) | an individual registered or formerly registered under the
securities legislation of a jurisdiction of Canada as a representative of
a person referred to in paragraph (d); | [ ] |
| (f) | the Government of Canada or a jurisdiction of Canada, or
any crown corporation, agency or wholly owned entity of the Government of
Canada or a jurisdiction of Canada; | [ ] |
| (g) | a municipality, public board or commission in Canada and
a metropolitan community, school board, the Comité de gestion de la taxe
scolaire de lîle de Montréal or an intermunicipal management board in
Québec; | [ ] |
| (h) | any national, federal, state, provincial, territorial or
municipal government of or in any foreign jurisdiction, or any agency of
that government; | [ ] |
| (i) | a pension fund that is regulated by the Office of the
Superintendent of Financial Institutions (Canada) or a pension commission
or similar regulatory authority of a jurisdiction of Canada; | [ ] |
| (j) | an individual who, either alone or with a spouse,
beneficially owns financial assets having an aggregate realizable value
that before taxes, but net of any related liabilities, exceeds
$1,000,000; | [ ] |
| (k) | an individual whose net income before taxes exceeded
$200,000 in each of the 2 most recent calendar years or whose net income
before taxes combined with that of a spouse exceeded $300,000 in each of
the 2 most recent calendar years and who, in either case, reasonably
expects to exceed that net income level in the current calendar
year; | [ ] |
| (l) | an individual who, either alone or with a spouse, has net
assets of at least $5,000,000; | [ ] |
| (m) | a person, other than an individual or investment fund,
that has net assets of at least $5,000,000 as shown on its most recently
prepared financial statements (prepared in accordance with applicable
generally accepted accounting principles), and that was not created or
used solely to purchase or hold the Units as an accredited
investor; | [ ] |
| (n) | an investment fund that distributes or has distributed
its securities only to | [ ] |
| | (i) | a person that is or was an accredited investor at the
time of the distribution, |
| | (ii) | a person that acquires or acquired securities in the
circumstances referred to in sections 2.10 [Minimum amount
investment] , or 2.19 [Additional investment in investment funds] of NI 45-106, or |
| | (iii) | a person described in paragraph (i) or (ii) that acquires
or acquired securities under section 2.18 [Investment fund
reinvestment] of NI 45-106, |
| (o) | an investment fund that distributes or has distributed
securities under a prospectus in a jurisdiction of Canada for which the
regulator or, in Québec, the securities regulatory authority, has issued a
receipt; | [ ] |
| (p) | a trust company or trust corporation registered or
authorized to carry on business under the Trust and Loan Companies Act (Canada) or under comparable legislation in a jurisdiction of Canada
or a foreign jurisdiction, acting on behalf of a fully managed account
managed by the trust company or trust corporation, as the case may
be; | [ ] |

| (q) | a person acting on behalf of a fully managed account
managed by that person, if that person | |
| --- | --- | --- |
| | (i) | is registered or authorized to carry on business as an
adviser or the equivalent under the securities legislation of a
jurisdiction of Canada or a foreign jurisdiction, and |
| | (ii) | in Ontario, is purchasing a security that is not a
security of an investment fund; |
| (r) | a registered charity under the Income Tax Act (Canada) that, in regard to the trade, has obtained advice from an
eligibility adviser or an adviser registered under the securities
legislation of the jurisdiction of the registered charity to give advice
on the securities being traded; | [ ] |
| (s) | an entity organized in a foreign jurisdiction that is
analogous to any of the entities referred to in paragraphs (a) to (d) or
paragraph (i) in form and function; | [ ] |
| (t) | a person in respect of which all of the owners of
interests, direct, indirect or beneficial, except the voting securities
required by law to be owned by directors, are persons that are accredited
investors; | [ ] |
| (u) | an investment fund that is advised by a person registered
as an adviser or a person that is exempt from registration as an adviser;
or | [ ] |
| (v) | a person that is recognized or designated by the
securities regulatory authority or, except in Ontario and Québec, the
regulator as an accredited investor; or | [ ] |

(ii) if not purchasing under clause (i), above, the Aggregate Subscription Price of the Units purchased by the Subscriber or the Disclosed Principal, as the case may be, is not less than $150,000 paid in cash at the time of the distribution and the Subscriber or the Disclosed Principal, as the case may be, has not been created or used solely to purchase or hold securities in reliance on this exemption.

The foregoing representations are true and accurate as of the date of this certificate and will be true and accurate as of the Closing Date. If any such representation shall not be true and accurate prior to the Closing Date, the undersigned shall give immediate written notice of such fact to the Corporation.

Dated: November ___, 2013
	Name of Subscriber
Name of witness (if the Subscriber is an individual)	Signature of Subscriber
Signature of witness	If the Subscriber is a corporation, print name
and title of Authorized Signing Officer

SCHEDULE C
UNITED STATES
SUBSCRIBERS REPRESENTATION LETTER

This Representation Letter is being delivered in connection with the execution and delivery of the Subscription Agreement of the undersigned subscriber (the Subscriber ) in connection with the purchase of Units (the Units and, together with the Common Shares forming part of the Units, the Warrants and the Warrant Shares, collectively, the Securities ) of Sphere 3D Corporation (the Corporation ). Capitalized terms used herein and not defined herein will have the meanings ascribed thereto in the Subscription Agreement. The Subscriber represents, warrants and covenants (which representations, warranties and covenants will survive the Closing Date) on its own behalf and, if applicable, on behalf of any beneficial purchaser for whom the Subscriber is contracting hereunder to and with the Corporation, the Underwriters and the U.S. Affiliate and acknowledges that the Corporation, the Underwriters, U.S. Affiliate and their respective counsel are relying thereon that:

| (a) | The Subscriber is (i) purchasing the Units as principal
for its own account and not for the benefit of any other Person and it is
an institutional accredited investors who satisfies one or more of the
criteria of Rule 501(a)(1), (2), (3) or (7) of Regulation D under the U.S.
Securities Act) (a U.S. Accredited Investor ); or (ii) subscribing
for the Units as agent for a beneficial purchaser disclosed on the
execution page of this Subscription Agreement, in a transaction in which
the Subscriber is exercising sole investment discretion with respect to
the purchase of the Units and the Subscriber and each disclosed purchaser
for whom it is acting is a U.S. Accredited Investor and is purchasing as
principal for its own account and not for the benefit of any other person;
and the Subscriber has initialled the category of U.S. Accredited Investor
applicable to the Subscriber and any beneficial purchaser below. |
| --- | --- |
| (b) | The Subscriber (and, if the Subscriber is acting on
behalf of a beneficial purchaser, such beneficial purchaser) is a U.S.
Accredited Investor as a result of satisfying the requirements of the
paragraphs below that the Subscriber has indicated ( the line identified
as BP is to be initialled by the undersigned if the beneficial
purchaser, if any, satisfies the requirements of the corresponding
paragraph ). |

| __ _(BP) | any bank as defined in Section 3(a)(2) of the U.S.
Securities Act or any savings and loan association or other institution as
defined in Section 3(a)(5)(A) of the U.S. Securities Act whether acting in
its individual or fiduciary capacity; |
| --- | --- |
| | any broker or dealer registered pursuant to Section 15 of
the Securities Exchange Act of 1934; |
| (BP) | |
| | any insurance company as defined in Section 2(a)(13) of
the U.S. Securities Act; |
| (BP) | |
| (BP) | any investment company registered under the Investment
Company Act of 1940, or a business development company as defined in
Section 2(a)(48) of that Act; |
| (BP) | any Small Business Investment Company licensed by the
U.S. Small Business Administration under Section 301(c) or (d) of the
Small Business Investment Act of 1958; |
| ___(BP) | any plan established and maintained by a state, its
political subdivisions, or any agency or instrumentality of a state or its
political subdivisions, for the benefit of its employees, if such plan has
total assets in excess of US$5,000,000; |

| __ _(BP) | any employee benefit plan within the meaning of
the Employee Retirement Income Security Act of 1974, if the investment
decision is made by a plan fiduciary, as defined in Section 3(21) of such
Act, which is either a bank, savings and loan association, insurance
company, or registered investment adviser, or if the employee benefit plan
has total assets in excess of US$5,000,000, or, if a self-directed plan,
with investment decisions made solely by persons that are U.S. Accredited
Investors; |
| --- | --- |
| (BP) | any private business development company as
defined in Section 202(a)(22) of the Investments Advisers Act of 1940; |
| (BP) | any organization described in section 501(c)(3)
of the Internal Revenue Code of 1986, corporation, Massachusetts or
similar business trust, or partnership not formed for the specific purpose
of acquiring the Units, with total assets in excess of US$5,000,000; or |
| ___(BP) | any trust with total assets in excess of
US$5,000,000, not formed for the specific purpose of acquiring the Units,
whose purchase is directed by a sophisticated person, being defined as a
person who has such knowledge and experience in financial and business
matters that he or she is capable of evaluating the merits and risks of
the prospective investment. |

| (c) | The Subscriber has not purchased the Units as a result of
any form of general solicitation or general advertising (as those
terms are used in Rule 502(c) of Regulation D), including, without
limitation, advertisements, articles, notices or other communications
published in any newspaper, magazine or similar media or the Internet or
broadcast over radio, television, or the Internet or any seminar or
meeting whose attendees have been invited by general solicitation or
general advertising. |
| --- | --- |
| (d) | The Subscriber has had access to such information
concerning the Corporation as it has considered necessary or appropriate
in connection with its investment decision to acquire the Units and has
such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of its investment and it is
able to bear the economic risk of loss of its investment in the
Units. |
| (e) | The Subscriber understands and acknowledges that none of
the Securities have been or will be registered under the U.S. Securities
Act or the securities laws of any state, and that the Units are being
offered and sold to a limited number of U.S. Accredited Investors in
transactions exempt from registration under the U.S. Securities Act and
applicable state securities laws; accordingly, the Securities are or will
be when issued, as applicable, restricted securities within the meaning
of Rule 144(a)(3) of the U.S. Securities Act. |
| (f) | The Subscriber, and each beneficial purchaser, if any, is
acquiring the Units for investment purposes only and not with a view to
any resale, distribution or other disposition of Units in violation of
United States federal or state securities laws, and the Subscriber
acknowledges that the exemption from registration under the U.S.
Securities Act and applicable state securities laws depends, among other
things, upon the bona fide nature of the investment intent
expressed herein. |
| (g) | The Subscriber understands that if it (or any beneficial
purchaser on whose behalf it is acting) decides to offer, sell, pledge or
otherwise transfer any of the Securities they may be offered, sold,
pledged or otherwise transferred only (i) to the Corporation, (ii) outside
the United States in compliance with Rule 904 of Regulation S and in
compliance with applicable local laws and regulations, (iii) pursuant to a
registration statement that has been declared effective under the U.S.
Securities Act and is available for resale of the Securities, or (iv) in
compliance with an exemption from registration under the U.S. Securities Act
including Rule 144 or Rule 144A thereunder, if available, and, in each
case, in compliance with any applicable state securities laws. The
Subscriber further understands and agrees that in the event of a transfer
pursuant to the foregoing clause (ii) or (iv), the Corporation will
require a legal opinion of counsel of recognized standing, or other
evidence, reasonably satisfactory to the Corporation that such transfer is
exempt from registration under the U.S. Securities Act and applicable
state securities laws. |

(h) The Subscriber understands that upon the original issuance thereof, and until such time as the same is no longer required under applicable requirements of the U.S. Securities Act or applicable state securities laws, certificates representing the Securities and all certificates issued in exchange therefore or in substitution thereof, will bear the following legends (in addition to those set forth in Section 8(y) of the Subscription Agreement):

THE SECURITIES REPRESENTED HEREBY [AND IF WARRANTS, THE FOLLOWING SHALL BE ADDED: AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF] HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE U.S. SECURITIES ACT) OR ANY STATE SECURITIES LAWS, AND MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (A) TO THE CORPORATION (B) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE U.S. SECURITIES ACT AND IN COMPLIANCE WITH LOCAL LAWS AND REGULATIONS, (C) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE U.S. SECURITIES ACT AND IS AVAILABLE FOR RESALE OF THE SECURITIES, OR (D) IN COMPLIANCE WITH AN EXEMPTION FROM REGISTRATION UNDER THE U.S. SECURITIES ACT, INCLUDING RULE 144 OR RULE 144A THEREUNDER, IF AVAILABLE, AND, IN EACH CASE, IN COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES LAWS. THE HOLDER FURTHER UNDERSTANDS AND AGREES THAT IN THE EVENT OF A TRANSFER PURSUANT TO THE FOREGOING CLAUSE (B) OR (D), THE CORPORATION WILL REQUIRE A LEGAL OPINION OF COUNSEL OF RECOGNIZED STANDING OR OTHER EVIDENCE REASONABLY SATISFACTORY TO THE CORPORATION THAT SUCH TRANSFER IS EXEMPT FROM REGISTRATION UNDER THE U.S. SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. DELIVERY OF THIS CERTIFICATE MAY NOT CONSTITUTE GOOD DELIVERY IN SETTLEMENT OF TRANSACTIONS ON STOCK EXCHANGES IN CANADA.

provided, that if the Securities are being sold outside the United States in compliance with the requirements of Rule 904 of Regulation S at a time when the Corporation is a foreign issuer, as defined in Rule 902(e) of Regulation S at the time of sale, the legend set forth above may be removed by providing an executed declaration to the registrar and transfer agent of the Corporation and to the Corporation, in substantially the form set forth as Annex A hereto (or in such other form as the Corporation may prescribe from time to time) and, if requested by the Corporation or the registrar and transfer agent, an opinion of counsel of recognized standing in form and substance satisfactory to the Corporation and the registrar and transfer agent to the effect that such sale is being made in compliance with Rule 904 of Regulation S;

provided further, that if any of the Securities are being sold pursuant to Rule 144 under the U.S. Securities Act and in compliance with any applicable state securities laws, the legend may be removed by delivery to the Corporations registrar and transfer agent of an opinion satisfactory to the Corporation and its registrar and transfer agent to the effect that the legend is no longer required under applicable requirements of the U.S. Securities Act or applicable state securities laws.

| (i) | The Subscriber understands that the Warrants may not be
exercised in the United States or by or on behalf of a U.S. Person unless
an exemption is available from the registration requirements of the U.S.
Securities Act and all applicable state securities laws and the holder has
delivered to the Corporation a written opinion of counsel reasonably
satisfactory to the Corporation to such effect; provided, however, that an
original Subscriber in the Offering that is in the United States or a U.S.
Person will not be required to deliver an opinion of counsel in connection
with the exercise of Warrants purchased in the Offering by such original
Subscriber that is in the United States or a U.S. Person, on its own
behalf or on behalf of the original beneficial purchaser (if any), at a
time when it and such beneficial purchaser (if any) are U.S. Accredited
Investors. |
| --- | --- |
| (j) | The Subscriber understands that all certificates
representing the Warrants will bear the following
legend: |

THESE WARRANTS AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE U.S. SECURITIES ACT) OR UNDER ANY STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING SUCH SECURITIES, AGREES FOR THE BENEFIT OF THE CORPORATION THAT SUCH SECURITIES MAY NOT BE EXERCISED IN THE UNITED STATES OR BY OR ON BEHALF OF A U.S. PERSON UNLESS AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE U.S. SECURITIES ACT AND ALL APPLICABLE STATE SECURITIES LAWS IS AVAILABLE. THE TERMS UNITED STATES AND U.S. PERSON ARE AS DEFINED IN REGULATION S UNDER THE U.S. SECURITIES ACT.

| (k) | The Subscriber consents to the Corporation making a
notation on its records or giving instruction to the registrar and
transfer agent of the Corporation in order to implement the restrictions
on transfer and exercise with respect to the Securities set forth and
described herein. |
| --- | --- |
| (l) | The Subscriber understands that the Corporation (i) is
under no obligation to remain a foreign issuer (as defined in Rule
902(e) of Regulation S), (ii) may not be a foreign issuer at a time when
the Subscriber wishes to transfer the Securities, and (iii) may engage in
one or more transactions which could cause the Corporation not to be a
foreign issuer. The Subscriber further understands and acknowledges that
the loss of the Corporations foreign issuer status would impede the
Subscribers ability to remove the restrictive U.S. legend from the
Securities in connection with any resale outside the United
States. |
| (m) | The Subscriber understands that the Corporation is not
obligated to file and has no present intention of filing with the U.S.
Securities and Exchange Commission or with any state securities
administrator any registration statement in respect of resales of the
Securities in the United States. |
| (n) | The Subscriber understands and agrees that the financial
statements of the Corporation have been prepared in accordance with
International Financial Reporting Standards, which differ in some respects
from United States generally accepted accounting principles, and thus may
not be comparable to financial statements of United States
companies. |
| (o) | The Subscriber understands and agrees that there may be
material tax consequences to it of an acquisition, holding, exercise or
disposition of the Securities. The Corporation gives no opinion and makes
no representation with respect to the tax consequences to the Subscriber
under United States, state, local or foreign tax law of its acquisition,
holding , exercise or disposition of the Securities, and the
Subscriber acknowledges that it is solely responsible for determining
the tax consequences to it with respect to its investment,
including whether the Corporation will at any given time be deemed a
passive foreign investment company within the meaning of Section 1297 of
the United States Internal Revenue Code of 1986, as amended. |

| (p) | The Subscriber is aware that its ability to enforce civil
liabilities under the United States federal securities laws may be
affected adversely by, among other things: (i) the fact that the
Corporation is organized under the laws of Canada; (ii) some or all of the
directors and officers may be residents of countries other than the United
States; and (iii) all or a substantial portion of the assets of the
Corporation and such persons may be located outside the United
States. |
| --- | --- |
| (q) | The office or other address of the Subscriber at which
the Subscriber received and accepted the offer to purchase the Units is
the address listed as the Subscribers Residential Address on the
face page of the Subscription Agreement. |
| (r) | that the funds representing the Aggregate Subscription
Price which will be advanced by the Subscriber to the Corporation
hereunder will not represent proceeds of crime for the purposes of the Uniting and Strengthening America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism Act (the PATRIOT
Act ) and the Subscriber acknowledges that the Issuer may in the
future be required by law to disclose the Subscriber's name and other
information relating to the subscription agreement and the Subscriber's
subscription hereunder, on a confidential basis, pursuant to the PATRIOT
Act. No portion of the Aggregate Subscription Price to be provided by the
Subscriber (i) has been or will be derived from or related to any activity
that is deemed criminal under the laws of the United States, or any other
jurisdiction, or (ii) is being tendered on behalf of a person or entity
who has not been identified to or by the Subscriber, and it shall promptly
notify the Issuer if the Subscriber discovers that any of such
representations ceases to be true and provide the Issuer with appropriate
information in connection therewith |
| (s) | The provisions of this Representation Letter will be true
and correct both as of the date of execution of this Subscription
Agreement and as of the Closing Date. |

The Subscriber undertakes to notify the Corporation immediately of any change in any representation, warranty or other information relating to the Subscriber or, if applicable, the beneficial purchaser set forth herein, which takes place prior to the Closing Date.

DATED at ________this ___ day of November, 2013.

If a Corporation, Partnership or Other Entity :
Name of Entity
Type of Entity
Signature of Person Signing
Print or Type Name and Title of Person Signing

ANNEX A TO SCHEDULE C

FORM OF DECLARATION FOR REMOVAL OF LEGEND

TO:	Sphere 3D Corporation
AND TO:	The registrar and transfer agent for the
securities of Sphere 3D Corporation

The undersigned (A) acknowledges that the sale of the securities of Sphere 3D Corporation (the Corporation ) to which this declaration relates is being made in reliance on Rule 904 of Regulation S under the United States Securities Act of 1933 , as amended (the U.S. Securities Act ) and (B) certifies that (1) the undersigned is not an affiliate of the Corporation as that term is defined in Rule 405 under the U.S. Securities Act, a distributor or an affiliate of distributor, (2) the offer of such securities was not made to a person in the United States and either (a) at the time the buy order was originated, the buyer was outside the United States, or the seller and any person acting on its behalf reasonably believed that the buyer was outside the United States or (b) the transaction was executed on or through the facilities of a designated offshore securities market (as defined in Rule 902 of Regulation S under the U.S. Securities Act) and neither the seller nor any person acting on its behalf knows that the transaction has been prearranged with a buyer in the United States, (3) neither the seller nor any affiliate of the seller nor any person acting on their behalf has engaged or will engage in any directed selling efforts in the United States in connection with the offer and sale of such securities, (4) the sale is bona fide and not for the purpose of washing-off the resale restrictions imposed because the securities are restricted securities as that term is described in Rule 144(a)(3) under the U.S. Securities Act, (5) the seller does not intend to replace such securities sold in reliance on Rule 904 of the U.S. Securities Act with fungible unrestricted securities, and (6) the contemplated sale is not a transaction, or part of a series of transactions, which, although in technical compliance with Regulation S under the U.S. Securities Act, is part of a plan or scheme to evade the registration provisions of the U.S. Securities Act. Unless otherwise specified, terms set forth above in quotation marks have the meanings given to them by Regulation S under the U.S. Securities Act.

The undersigned in making this Declaration acknowledges that the Corporation is relying on the contents hereof and hereby agrees to indemnify and hold harmless the Corporation for any and all liability, losses, claims and demands in any way related to the subject matter of this Declaration.

DATED at ____ this _ day of ___, 20.

By: _________ Name: Title:

AFFIRMATION BY SELLERS BROKER-DEALER (REQUIRED FOR SALES IN ACCORDANCE WITH SECTION (B)(2)(B) ABOVE)

We have read the foregoing representations of our customer, ____ (the Seller) dated ________, with regard to our sale, for such Sellers account, of the securities of the Company described therein, and on behalf of ourselves we certify and affirm that (A) we have no knowledge that the transaction had been prearranged with a buyer in the United States, (B) the transaction was executed on or through the facilities of the TSX Venture Exchange, (C) neither we, nor any person acting on our behalf, engaged in any directed selling efforts in connection with the offer and sale of such securities, and (D) no selling concession, fee or other remuneration is being paid to us in connection with this offer and sale other than the usual and customary brokers commission that would be received by a person executing such transaction as agent. Terms used herein have the meanings given to them by Regulation S under the U.S. Securities Act.

____________ Name of Firm

By: _____________ Authorized officer

Date: ____

SCHEDULE D
SUBSCRIBER
INFORMATION SHEET

INFORMATION TO BE COMPLETED BY EACH SUBSCRIBER:

A Registration Form

The Subscriber, if not an individual and (i) is a member of the Pro Group (as described below), or (ii) is (or will be after completion of the Offering) an Insider (as described below), or (iii) will be a holder of more than 5% of the listed shares after completion of the Offering , either [check appropriate box] :

| [ ] | has previously filed with the TSX Venture Exchange (the
TSXV ) a Form 4C, Corporate Placee Registration Form, represents
and warrants that there has been no change to any of the information in
the Corporate Placee Registration Form previously filed with the TSXV up
to the date hereof; or |
| --- | --- |
| [ ] | hereby delivers a completed Form 4C, Corporate Placee
Registration Form, in the form attached as Appendix A to this Schedule C
to the Corporation for filing with the TSXV. |

B. Present Ownership of Securities

The Subscriber either [check appropriate box] :

| [ ] | does not own directly or
indirectly, or exercise control or direction over, any common shares of
the Corporation or securities convertible into common shares of the
Corporation; or |
| --- | --- |
| [ ] | owns directly or indirectly, or
exercises control or direction over, __ outstanding common
shares of the Corporation and convertible securities entitling the
Subscriber to acquire additional common shares of the Corporation which,
if converted, in the aggregate would represent __common
shares of the Corporation. |

C. Insider Status

The Subscriber either [check appropriate box] :

[ ] is an Insider of the Corporation as defined in the policies of the TSXV as follows:

| (a) | a director or senior officer of the
Corporation; |
| --- | --- |
| (b) | a director or senior officer of a company that is itself
an Insider or subsidiary of the Corporation; |
| (c) | a person that beneficially owns or controls, directly or
indirectly, voting shares of the Corporation carrying more than 10% of the
voting rights attached to all the Corporations outstanding voting shares;
or |
| (d) | the Corporation itself if it holds any of its own
securities; or |

[ ] is not an Insider of the Corporation.

D. Member of Pro Group

The Subscriber either [check appropriate box] :

[ ] is a member of the Pro Group as defined in the Rules of the TSXV, as follows:

| 1 | subject to subparagraphs (2), (3) and (4), either
individually or as a group: | |
| --- | --- | --- |
| | (a) | the member (i.e. a member of the TSXV under TSXV
requirements); |
| | (b) | employees of the member; |
| | (c) | partners, officers or directors of the member; |
| | (d) | affiliates of the member; and |
| | (e) | associates of any parties referred to in subparagraphs
(a) through (d); |
| 2. | the TSXV may, in its discretion, include a person or
party in the Pro Group for the purposes of a particular calculation where
the TSXV determines that the person is not acting at arms length with the
member; | |
| 3. | the TSXV may, in its discretion, exclude a person from
the Pro Group for the purposes of a particular calculation where the TSXV
determines that the person is acting at arms length with the
member; | |
| 4. | the member may deem a person who would otherwise be
included in the Pro Group pursuant to subparagraph (1) to be excluded from
the Pro Group where the member determines that: | |
| | (a) | the person is an affiliate or associate of the member
acting at arms length of the member; |
| | (b) | the associate or affiliate has a separate corporate and
reporting structure; |
| | (c) | there are sufficient controls on information flowing
between the member and the associate or affiliate; and |
| | (d) | the member maintains a list of such excluded persons;
or |

[ ] is not a member of the Pro Group.

APPENDIX A TO SCHEDULE D

TSX VENTURE EXCHANGE PRIVATE PLACEMENT FORM

FORM 4C CORPORATE PLACEE REGISTRATION FORM

This Form will remain on file with the Exchange and must be completed if required under section 4(b) of Part II of Form 4B. The corporation, trust, portfolio manager or other entity (the Placee ) need only file it on one time basis, and it will be referenced for all subsequent Private Placements in which it participates. If any of the information provided in this Form changes, the Placee must notify the Exchange prior to participating in further placements with Exchange listed Issuers. If as a result of the Private Placement, the Placee becomes an Insider of the Corporation, Insiders of the Placee are reminded that they must file a Personal Information Form (2A) or, if applicable, Declarations, with the Exchange.

1.	Placee Information:
	(a)	Name:
__________________
	(b)	Complete Address:
______________
	(c)	Jurisdiction of Incorporation or Creation:
__________
2.	(a)	Is the Placee purchasing securities as a portfolio manager:
(Yes/No)? _______
	(b)	Is the Placee carrying on business as a portfolio manager
outside of Canada: (Yes/No)?
_____
3.	If the answer to 2(b) above was Yes, the undersigned
certifies that:

| (a) | it is purchasing securities of the Corporation on behalf
of managed accounts for which it is making the investment decision to
purchase the securities and has full discretion to purchase or sell
securities for such accounts without requiring the clients express
consent to a transaction; |
| --- | --- |
| (b) | it carries on the business of managing the investment
portfolios of clients through discretionary authority granted by those
clients (a portfolio manager business) in ________
[jurisdiction], and it is permitted by law to carry on a portfolio manager
business in that jurisdiction; |
| (c) | it was not created solely or primarily for the purpose of
purchasing securities of the Corporation; |
| (d) | the total asset value of the investment portfolios it
manages on behalf of clients is not less than $20,000,000; and |
| (e) | it has no reasonable grounds to believe, that any of the
directors, senior officers and other insiders of the Corporation, and the
persons that carry on investor relations activities for the Corporation
has a beneficial interest in any of the managed accounts for which it is
purchasing. |

If the answer to 2(a). above was No, please provide the names and addresses of Control Persons of the Placee:

Name * City Province or State Country

If the Control Person is not an individual, provide the name of the individual that makes the investment decisions on behalf of the Control Person.
Acknowledgement - Personal Information and Securities Laws

| (a) | Personal Information means any information about
an identifiable individual, and includes information contained in sections
1, 2 and 4, as applicable, of this Form. | |
| --- | --- | --- |
| | The undersigned hereby acknowledges and agrees that it
has obtained the express written consent of each individual to: | |
| | (i) | the disclosure of Personal Information by the undersigned
to the Exchange (as defined in Appendix 6B) pursuant to this Form;
and |
| | (ii) | the collection, use and disclosure of Personal
Information by the Exchange for the purposes described in Appendix 6B or
as otherwise identified by the Exchange, from time to time. |
| (b) | The undersigned acknowledges that it is bound by the
provisions of applicable Securities Law, including provisions concerning
the filing of insider reports and reports of
acquisitions. | |

Dated and certified (if applicable), acknowledged and agreed, at _______on _________.

(Name of Purchaser - please print)
(Authorized Signature)
(Official Capacity - please print)
(Please print name of individual whose
signature appears above)

THIS IS NOT A PUBLIC DOCUMENT

Exhibit B

SUBSCRIPTION FOR SPECIAL WARRANTS

| TO: | S PHERE 3D
C ORPORATION (the Corporation) |
| --- | --- |
| AND TO: | C ORMARK S ECURITIES I NC ., J ACOB S ECURITIES I NC . AND P ARADIGM C APITAL I NC .
(collectively, the Underwriters) |
| AND TO: | T HE U.S.
A FFILIATES (as defined herein) |

The undersigned (hereinafter referred to as the Subscriber ) hereby irrevocably subscribes for and agrees to purchase from the Corporation the number of special warrants of the Corporation (the Special Warrants ) set forth below for the aggregate subscription price set forth below, representing a subscription price of Cdn.$8.50 per Special Warrant, upon and subject to the terms and conditions set forth in this Subscription Agreement, including the attached Terms and Conditions of Subscription, the applicable schedules attached hereto and the Term Sheet attached hereto as Schedule A (the Term Sheet ). Each Special Warrant will entitle the holder thereof to acquire, without additional payment, one unit of the Corporation (each, a Unit ). Each Unit consists of one common share in the capital of the Corporation (a Common Share ) and one-half of one Common Share purchase warrant (each whole Common Share purchase warrant, a Warrant ). Each Warrant will entitle the holder thereof to acquire one additional Common Share (a Warrant Share ) at a price of Cdn.$11.50 at any time prior to 5:00 p.m. (Toronto time) on the date that is 24 months following the Closing Date (as defined herein). If the Qualification Date (as defined below) does not occur on or before July 31, 2014, each Special Warrant outstanding will, on exercise or deemed exercise, entitle the Subscriber to acquire an additional 0.05 of a Unit without further payment on the part of the Subscriber (the Penalty ). In addition to this face page, the Subscriber must also complete all applicable schedules attached hereto.

SUBSCRIPTION AND SUBSCRIBER INFORMATION

Please print all information (other than signatures), as applicable, in the space provided below.

| | Number of Special Warrants:
____x Cdn.$8.50 |
| --- | --- |
| (Name of Subscriber) | |
| | = |
| Account Reference (if applicable):
____ | |
| | Aggregate Subscription Price:
_____ |
| By: _________ | |
| | Please complete if purchasing as agent or
trustee for a principal (beneficial purchaser) |
| (Official Capacity or Title if the Subscriber is not an
individual) | (a Disclosed Principal) and not purchasing as
agent or trustee for accounts fully |
| | managed by it: |
| (Name of individual whose signature appears above if different
than the name of the | |
| Subscriber printed above.) | |
| | (Name of Disclosed Principal) |
| (Subscribers Residential Address, including Province/State and
Postal/ZIP Code) | |
| | (Disclosed Principals Residential Address
including Province/State and Postal/ZIP Code) |
| (Telephone Number) | |
| (E-mail Address) | (Disclosed Principals Telephone Number) |
| Account Registration Information: | Delivery Instructions as set forth below: |
| | [ ] Same address as account registration, or |
| (Name) | |
| | (Name) |
| (Account Reference, if applicable) | |
| (Address, including Postal Code) | (Account Reference, if applicable) |
| Number and kind of securities of the Corporation held, if any: | |
| | (Address including Province/State and Postal/ZIP
Code) |
| | (Contact Name) |

ACCEPTANCE

The Corporation hereby accepts the subscription as set forth above on the terms and conditions contained in this Subscription Agreement.

Dated as of the ____ day of June, 2014.

SPHERE 3D CORPORATION

by:
Authorized Signing Officer

SPHERE 3D CORPORATION

SUBSCRIPTION FOR SPECIAL WARRANTS

INSTRUCTIONS

PLEASE MAKE SURE THAT YOUR SUBSCRIPTION INCLUDES:

PROCEDURE AND DELIVERY:

Subscription forms should be completed, signed and delivered with payment, by no later than 4:00 p.m. (Toronto time) on Monday, May 26, 2014 (or such other time, date or place as the Subscriber may be advised), to:

Cormark Securities Inc. Royal Bank Plaza, South Tower 200 Bay Street, Suite 2800 Toronto, ON M5J 2J2

Attention: Christine Dolap Fax: 416.943.6496 Email: [email protected]

TERMS AND CONDITIONS OF SUBSCRIPTION

SPECIAL WARRANTS OF SPHERE 3D CORPORATION

The Subscriber understands that the Underwriters have agreed to purchase 1,176,500 Special Warrants from the Corporation for aggregate gross proceeds of $10,000,250 with the right to substitute purchasers to eligible investors and subject to the Underwriters option (the Underwriters Option ) to purchase up to an additional 176,475 Special Warrants (the Offering ). The Special Warrants will be created under the Special Warrant Indenture (as defined herein). Upon the terms and subject to the conditions contained in the Special Warrant Indenture, each Special Warrant will entitle the holder thereof to acquire, upon exercise or deemed exercise thereof, without additional payment, one Unit (subject to the Penalty) and subject to an adjustment in accordance with the terms and conditions of the Special Warrant Indenture. Each Unit will consist of one Common Share and one-half of one Warrant. The Special Warrants will be deemed to be automatically exercised on the earlier of (i) the third business day following the Qualification Date (as defined herein) and (ii) the Qualification Deadline (as defined herein).

The Special Warrants, the Units, the Common Shares forming part of the Units, the Warrants and the Warrant Shares are collectively referred to as the Securities . All Special Warrants sold for the account or benefit of, a person in the United States or U.S. Persons, if any, in accordance with Rule 506(b) of Regulation D under the U.S. Securities Act shall be sold directly to such persons as substituted purchasers by the Corporation in accordance with Schedule C of this Subscription Agreement.

1.
(a)	$ means Canadian dollars;
(b)	Aggregate Subscription Price means the aggregate
dollar amount of the subscription under this Subscription Agreement as set
out on the face page hereof;
(c)	business day means a day other than a Saturday,
Sunday or any other day on which the principal chartered banks located in
Toronto, Ontario are not open for business;
(d)	Canadian Offering Jurisdictions means each of
the provinces of British Columbia, Alberta, Ontario and such other
provinces and territories of Canada as may be agreed upon between the Lead
Underwriter and the Corporation;
(e)	Canadian Securities Laws means, as applicable,
the securities laws and regulations in each of the Canadian Offering
Jurisdictions, all written instruments, rules and orders having the force
of law of the securities regulators or regulatory authorities in each of
the Canadian Offering Jurisdictions and the rules of the TSXV;
(f)	CDS means CDS Clearing and Depository Services
Inc.;
(g)	Closing has the meaning ascribed to such term in
Section 4;
(h)	Closing Date means June 3, 2014 or such other
date as the Corporation and the Underwriters may agree;
(i)	Closing Time means 10:00 a.m. (Toronto time) on
the Closing Date or such other time as the Corporation and the
Underwriters may agree;
(j)	Common Shares means common shares in the capital
of the Corporation;
(k)	control person means a person, company or
combination of persons or companies described in the provisions of
securities legislation listed in Appendix A to National Instrument 45-102

	Resale of Securities ;

| (l) | Corporation means Sphere 3D Corporation, a
corporation existing under the Business Corporations Act (Ontario)
and includes any successor corporation; |
| --- | --- |
| (m) | Disclosed Principal has the meaning ascribed to
such term on the face page of this Subscription Agreement; |
| (n) | Expiry Date means the date that is the earlier
of (a) the third business day following the Qualification Date; and (b)
four months and one day after the Closing Date; |
| (o) | International Jurisdiction has the meaning
ascribed to such term in clause 10(p); |
| (p) | Lead Underwriter means Cormark Securities
Inc.; |
| (q) | misrepresentation has the meaning ascribed to
such term in the Securities Act (Ontario); |
| (r) | NI 45-106 means National Instrument 45-106 Prospectus and Registration Exemptions of the Canadian Securities
Administrators; |
| (s) | Notice has the meaning ascribed to such term on
the face page of this Subscription Agreement; |
| (t) | Offering has the meaning ascribed to it in the
preamble to the Terms and Conditions of Subscription; |
| (u) | PCMLTFA has the meaning ascribed to such term in
clause 10(bb); |
| (v) | Penalty has the meaning ascribed to such term on
the face page of this Subscription Agreement. |
| (w) | person means any individual (whether acting as
an executor, trustee, administrator, legal representative or otherwise),
corporation, firm, partnership, sole proprietorship, syndicate, joint
venture, trustee, trust, fund, unincorporated organization or association,
a government or an agency or political subdivision thereof and every other
form of legal or business entity of whatsoever nature or kind, and
pronouns have a similar extended meaning; |
| (x) | Qualification Date means the date on which a
final receipt is issued by the Ontario Securities Commission, on behalf of
the securities regulatory authorities in each of the Canadian Offering
Jurisdictions, for the filing of a (final) short form prospectus to
qualify the distribution of the Common Shares and Warrants underlying the
Special Warrants; |
| (y) | Qualification Deadline means 4:59 p.m. (Toronto
time) on the date that is four months and a day immediately following the
Closing Date |
| (z) | Regulation D means Regulation D under the U.S.
Securities Act; |
| (aa) | Regulation S means Regulation S under the U.S.
Securities Act; |
| (bb) | Securities has the meaning ascribed to such term
in the preamble to the Terms and Conditions of Subscription; |
| (cc) | Securities Laws means, collectively, the
Canadian Securities Laws and the U.S. Securities Laws; |
| (dd) | Special Warrants has the meaning ascribed to
such term on the face page of this Subscription
Agreement; |

| (ee) | Special Warrant Indenture means the special
warrant indenture to be entered into as of the Closing Date between the
Corporation and the Special Warrant Trustee in respect of the Special
Warrants; |
| --- | --- |
| (ff) | Special Warrant Trustee means Equity Financial
Trust Company, in its capacity as the trustee pursuant to the Special
Warrant Indenture; |
| (gg) | Subscriber means the subscriber for Special
Warrants as set out on the face page of this Subscription Agreement and
includes, as applicable, the Disclosed Principal unless the context
otherwise requires; |
| (hh) | Subscription Agreement means this subscription
agreement (including any schedules hereto) and any instrument amending
this Subscription Agreement; hereof , hereto ,
hereunder , herein and similar expressions mean and refer
to this Subscription Agreement and not to a particular Section or clause;
and the expression Section or clause followed by a
number or letter means and refers to the specified Section or clause of
this Subscription Agreement; |
| (ii) | Time of Expiry means 5:00 p.m. (Toronto time) on
the Expiry Date; |
| (jj) | TSXV means the TSX Venture Exchange; |
| (kk) | TSXV Approval means the conditional acceptance
of the Offering by the TSXV; |
| (ll) | Underwriting Agreement means the underwriting
agreement to be entered into between the Underwriters and the Corporation
in respect of the Offering; |
| (mm) | Underwriters means, collectively, Cormark
Securities Inc., Jacob Securities Inc. and Paradigm Securities
Inc.; |
| (nn) | United States means the United States of
America, its territories and possessions, any State of the United States
and the District of Columbia; |
| (oo) | Units has the meaning ascribed to such term on
the face page of this Subscription Agreement; |
| (pp) | U.S. Affiliate means the U.S. registered
broker-dealer affiliate of the Underwriters; |
| (qq) | U.S. Accredited Investor means an institutional
accredited investor who satisfies one or more of the criteria of Rule
501(a)(1), (2), (3) or (7) of Regulation D under the U.S. Securities
Act; |
| (rr) | U.S. Person means a U.S. person as defined in
Rule 902(k) of Regulation S; |
| (ss) | U.S. Securities Act means the United States
Securities Act of 1933 , as amended; |
| (tt) | U.S. Securities Laws means the U.S. Securities
Act, the United States Exchange Act of 1934, as amended, and all rules and
regulations promulgated thereunder and the applicable securities (blue
sky) laws of the states of the United States; |
| (uu) | Warrant Indenture means the indenture to be
entered into between the Corporation and TMX Equity Transfer Services
Inc., as trustee, governing the terms and conditions of the
Warrants; |
| (vv) | Warrant Shares has the meaning ascribed to such
term on the face page of this Subscription Agreement;
and |

(ww) Warrants has the meaning ascribed to such term on the face page of this Subscription Agreement.

For greater certainty, the parties hereby acknowledge and agree that, if the Subscriber is acting as agent or trustee on behalf of a Disclosed Principal, the words Subscriber, it and its, whenever used in relation to representations, warranties, acknowledgements, covenants or indemnities (including in Sections 10 to 13) mean the Subscriber and, unless the context otherwise requires, the Disclosed Principal.

2. Subscription. The Subscriber hereby confirms its irrevocable subscription for the Special Warrants from the Corporation, on and subject to the terms and conditions set out in this Subscription Agreement and in the Underwriting Agreement, for the Aggregate Subscription Price which is payable as described herein. The Subscriber acknowledges (on its own behalf and, if applicable, on behalf of each Disclosed Principal) that upon acceptance by the Corporation of this Subscription Agreement, this Subscription Agreement will constitute a binding obligation of the Subscriber (including, if applicable, each Disclosed Principal) subject to the terms and conditions contained herein. Each Special Warrant will entitle the holder thereof to receive, without payment of additional consideration, one Unit subject to the Penalty and subject to adjustment in accordance with the terms and conditions of the Special Warrant Indenture.

3. Partial Acceptance or Rejection of Subscription. The Corporation may, in its absolute discretion, accept or reject the Subscribers subscription for Special Warrants as set forth in this Subscription Agreement, in whole or in part, and the Corporation reserves the right to allot to the Subscriber less than the amount of Special Warrants subscribed for under this Subscription Agreement. The Subscriber acknowledges and agrees that the acceptance of this Subscription Agreement will be conditional upon, among other things, the sale of the Special Warrants to the Subscriber being exempt from any prospectus and offering memorandum requirements of applicable Securities Laws and the equivalent provisions of securities laws of any other applicable jurisdiction and, to the extent possible, the Subscriber agrees to furnish the Corporation with all information that is reasonably necessary to confirm same.

If this Subscription Agreement is rejected in whole, any certified cheque, money order, bank draft or other form of payment delivered by the Subscriber to the Corporation on account of the Aggregate Subscription Price for the Special Warrants subscribed for will be promptly returned to the Subscriber without any interest paid on such amount. If this Subscription Agreement is accepted only in part, payment representing the amount by which the payment delivered by the Subscriber to the Corporation exceeds the subscription price of the number of Special Warrants sold to the Subscriber pursuant to a partial acceptance of this Subscription Agreement will be promptly delivered to the Subscriber without any interest paid on such amount.

4. Closing. Delivery and sale of the Special Warrants and payment of the Aggregate Subscription Price will be completed concurrently (the Closing ) at the offices of counsel to the Corporation at the Closing Time on the Closing Date or at such other time and place as the Corporation and the Underwriters may agree. If, prior to the Closing Time, the terms and conditions contained in this Subscription Agreement and the Underwriting Agreement have been complied with to the satisfaction of the Underwriters, acting reasonably, or waived by the Underwriters, the Underwriters shall deliver to the Corporation all completed Subscription Agreements, including this Subscription Agreement, and payment of the Aggregate Subscription Price for all of the Special Warrants sold pursuant to the Underwriting Agreement against delivery by the Corporation of the Special Warrants (by way of electronic deposit with CDS or in physical form, as applicable) and such other documentation as may be required pursuant to this Subscription Agreement and the Underwriting Agreement.

Cormark Securities Inc. Royal Bank Plaza, South Tower 200 Bay Street, Suite 2800 Toronto, ON M5J 2J2

Attention: Christine Dolap Fax: 416.943.6496 Email: [email protected]

| (a) | to receive certificates representing the Special Warrants
(by way of electronic deposit with CDS or in physical form, as
applicable), to execute on behalf of the Subscriber all closing receipts
and required documents, to complete and correct any errors or omissions in
any form or document provided by the Subscriber in connection with the
subscription for the Special Warrants hereunder, to approve any opinion,
certificate or other document addressed to the Subscriber and to exercise
any rights of termination contained in the Underwriting
Agreement; |
| --- | --- |
| (b) | to extend such time periods and to waive, in whole or in
part, any representations, warranties, covenants or conditions for the
benefit of the Subscriber contained in this Subscription Agreement and in
the Underwriting Agreement (or any ancillary or related document) that, in
the opinion of the Lead Underwriter, is not prejudicial to the interests
of the Subscriber; |
| (c) | to terminate or not deliver this Subscription Agreement
if any condition precedent is not satisfied, in such manner and on such
terms and conditions as the Lead Underwriter in its sole discretion may
determine; and |
| (d) | without limiting the generality of the foregoing, to
negotiate, settle, execute, deliver and amend, as the case may be, the
Underwriting Agreement. |

7. Special Warrant Indenture. The Subscriber, by its execution of this Subscription Agreement, agrees to be bound by the terms and conditions of the Special Warrant Indenture as if it was an original party thereto. The Subscriber acknowledges that, subject to the terms of the Special Warrant Indenture:

| (a) | each holder of Special Warrants will be entitled, on
surrender of the certificates representing its Special Warrants (including
electronic delivery via CDS, if applicable), to exercise such Special
Warrants to acquire, without additional payment, the applicable number of
Units at any time prior to the Time of Expiry; and |
| --- | --- |
| (b) | all of the Special Warrants that have not been exercised
on or prior to the Time of Expiry will be exercised on behalf of the
holder thereof by the Special Warrant Trustee, without any further action
on the part of such holder, immediately before the Time of Expiry, for the
applicable number of Units. |

8. Covenants of the Corporation. The Corporation covenants that it will use its best efforts to file a preliminary and (final) short form prospectus qualifying the Common Shares and Warrants underlying the Special Warrants and to obtain a receipt for the (final) short form prospectus from the securities regulatory authorities in each Canadian Offering Jurisdiction on or before July 31, 2014. The covenant of the Corporation contained in this section 8 will survive the Closing and, notwithstanding such Closing or any investigation made by or on behalf of the Subscriber with respect thereto, will continue in full force and effect for the benefit of the Subscriber until the Expiry Date. If the Qualification Date does not occur on or before July 31, 2014, each unexercised Special Warrant will thereafter entitle the holder to receive upon exercise, for no additional consideration, 1.05 Units.

9. Representations, Warranties and Additional Covenants of the Corporation. By execution of this Subscription Agreement, the Corporation hereby agrees with the Subscriber that the Subscriber shall have the benefit of the representations, warranties and covenants made by the Corporation to the Underwriters as set forth in the Underwriting Agreement, except as amended or waived by the Underwriters, as though the Subscriber were a party thereto. Such representations, warranties and covenants shall form an integral part of this Subscription Agreement and shall survive the closing of the purchase and sale of the Special Warrants and shall continue in full force and effect for the benefit of the Subscriber in accordance with the Underwriting Agreement.

10. Representations, Warranties, Covenants and Acknowledgements of the Subscriber. By executing this Subscription Agreement, the Subscriber (on its own behalf and, including if applicable, on behalf of each Disclosed Principal) represents, warrants, covenants and acknowledges to and with the Corporation, the Underwriters and the U.S. Affiliates (and acknowledges and agrees that the Corporation, the Underwriters, the U.S. Affiliates and their respective legal counsel are relying thereon) that:

Authorization and Effectiveness

| (a) | if the Subscriber is an individual, the Subscriber is of
the full age of majority in the jurisdiction in which this Subscription
Agreement is executed and is legally competent to execute, deliver and be
bound by this Subscription Agreement, to perform all of its obligations
hereunder and to undertake all actions required of the Subscriber
hereunder; |
| --- | --- |
| (b) | if the Subscriber is not an individual, the Subscriber
has the requisite power, authority, legal capacity and competence to
execute, deliver and be bound by this Subscription Agreement,
to perform all of its obligations hereunder and to undertake
all actions required of the Subscriber hereunder, all necessary approvals
of its directors, partners, shareholders, trustees or otherwise with
respect to such matters have been given or obtained and the individual
signing this Subscription Agreement has been duly authorized; |

| (c) | if the Subscriber is a body corporate, the Subscriber is
incorporated and validly subsisting under the laws of its jurisdiction of
incorporation; |
| --- | --- |
| (d) | if the Subscriber is acting as principal, this
Subscription Agreement has been duly and validly authorized, executed and
delivered by the Subscriber and, when accepted by the Corporation, will
constitute a legal, valid and binding obligation enforceable against the
Subscriber in accordance with the terms hereof (subject to bankruptcy,
insolvency and other laws limiting the enforceability of creditors rights
and subject to the qualification that equitable remedies may only be
granted in the discretion of a court of competent jurisdiction); |
| (e) | if the Subscriber is acting as agent or trustee
(including, for greater certainty, a portfolio manager or comparable
adviser) for a principal, the Subscriber is duly authorized to execute and
deliver this Subscription Agreement and all other necessary documents in
connection with such subscription on behalf of such principal, each of
whom is subscribing as principal for its own account and not for the
benefit of any other person, and this Subscription Agreement has been duly
and validly authorized, executed and delivered by or on behalf of, and,
when accepted by the Corporation, will constitute a legal, valid and
binding obligation enforceable in accordance with the terms hereof
(subject to bankruptcy, insolvency and other laws limiting the
enforceability of creditors rights and subject to the qualification that
equitable remedies may only be granted in the discretion of a court of
competent jurisdiction) against, such principal; |
| (f) | the execution and delivery of this Subscription
Agreement, the performance and compliance with the terms hereof, the
subscription for the Special Warrants and the completion of the
transactions contemplated hereby will not result in any material breach
of, or be in conflict with or constitute a material default under, or
create a state of facts which, after notice or lapse of time, or both,
would constitute a material default under any term or provision of the
constating documents, by-laws or resolutions of the Subscriber or a
Disclosed Principal (if not an individual), the Securities Laws or any
other applicable law, any agreement to which the Subscriber or a Disclosed
Principal is a party or any applicable regulation, judgment, decree, order
or ruling; |
| (g) | the Subscriber is not a person created or used solely to
purchase or hold securities in order to comply with or rely upon an
exemption from the prospectus requirements of applicable Securities Laws
and except as disclosed in writing to the Corporation, the Subscriber does
not act jointly or in concert with any other person or company for the
purposes of acquiring securities of the
Corporation; |

Disclosure if Purchasing as Underwriters or Trustee

Residence

(i) the Subscriber and, if applicable, each Disclosed Principal are resident, or if not an individual, has a head office, in the jurisdiction indicated on the face page of this Subscription Agreement as the Subscribers Residential Address and the Disclosed Principals Residential Address, respectively, such address was not created and is not used solely for the purpose of acquiring Special Warrants. The purchase by and sale to the Subscriber of the Special Warrants, and any act, solicitation, conduct or negotiation directly or indirectly in furtherance of such purchase or sale (whether with or with respect to the Subscriber or any Disclosed Principal) has occurred only in such jurisdiction;

Canadian Subscribers

| (j) | if the Subscriber is resident in Canada, the Subscriber
(or if applicable, the Disclosed Principal) is eligible to purchase the
Special Warrants pursuant to an exemption from the prospectus requirements
of the Canadian Securities Laws, and the Subscriber has completed,
executed and delivered to the Corporation a Subscriber Certificate in the
form attached hereto as Schedule B indicating that the Subscriber (or if
applicable, the Disclosed Principal) fits within one of the prospectus
exemption categories under applicable Canadian Securities Laws as set
forth therein, and confirms the truth and accuracy of all representations,
warranties and covenants made in such certificate as of the date of this
Subscription Agreement and as of the Closing Time; | |
| --- | --- | --- |
| (k) | the Subscriber (or if applicable, the Disclosed
Principal) acknowledges that: | |
| | (i) | no securities commission or similar regulatory authority
has reviewed or passed on the merits of the Securities; |
| | (ii) | there is no government or other insurance covering the
Securities; |
| | (iii) | there are risks associated with the purchase of the
Securities; |
| | (iv) | there are restrictions on the Subscribers ability to
resell the Securities and it is the responsibility of the Subscriber to
find out what those restrictions are and to comply with them before
selling the Securities; and |
| | (v) | the Corporation has advised the Subscriber that the
Corporation is relying on an exemption from the requirements to provide
the Subscriber with a prospectus and to sell securities through a person
registered to sell securities under the Canadian Securities Laws and, as a
consequence of acquiring Securities pursuant to this exemption, certain
protections, rights and remedies provided by the Canadian Securities Laws,
including statutory rights of rescission or damages, will not be available
to the Subscriber; |

U.S. Subscribers

| (l) | if the Subscriber is, or is subscribing for the account
or benefit of, a person in the United States or a U.S. Person, the
Subscriber (or any beneficial purchaser) is aware that the Securities have
not been and will not be registered under the U.S. Securities Act or the
securities laws of any state and the Special Warrants may not be offered
or sold, directly or indirectly, in the United States without registration
under the U.S. Securities Act or compliance with requirements of an
exemption from registration and it acknowledges that the Corporation has
no present intention of filing a registration statement under the U.S.
Securities Act in respect of the Securities; |
| --- | --- |
| (m) | if the Subscriber is, or is subscribing for the account
or benefit of, a person in the United States or a U.S. Person, the
Subscriber agrees to the additional terms included in Schedule C
hereto; |
| (n) | if the Subscriber is, or is subscribing for the account
or benefit of, a person in the United States or a U.S. Person, the
Subscriber (and, if applicable, such beneficial purchaser) is a U.S.
Accredited Investor purchasing the Special Warrants directly from the
Corporation and the Subscriber has completed Schedule C hereto and
identified in Schedule C the appropriate category of U.S. Accredited
Investor that correctly and in all respects describes the Subscriber (and,
if applicable, such beneficial purchaser); |

10 -

Non-U.S. Subscribers

(o)
(i)	the Special Warrants have not been offered to the
Subscriber or any beneficial purchaser for whom it is acting while the
Subscriber or such beneficial person, if applicable, was in the United
States, and the individuals making the order to purchase the Special
Warrants and executing and delivering this Subscription Agreement for the
account or benefit of the Subscriber or such beneficial purchaser were not
in the United States when the order was placed or when this Subscription
Agreement was executed and delivered;
(ii)	the Subscriber is not in the United States or a U.S.
Person and is not purchasing the Special Warrants for the account or
benefit of a person in the United States or a U.S. Person;
(iii)	the Subscriber is not purchasing the Special Warrants as
the result of any directed selling efforts (as defined in Rule 902(c) of
Regulation S under the U.S. Securities Act and, including, but not limited
to, any press releases made by the Corporation relating to the proposed
Offering of the Special Warrants or any report, notification or summary of
the same) made in the United States by the Corporation, a distributor, any
of their respective affiliates, or any person acting on behalf of any of
the foregoing;
(iv)	the current structure of this transaction and all
transactions and activities contemplated hereunder is not a scheme to
avoid the registration requirements of the U.S. Securities Act;
and
(v)	the Subscriber or any beneficial purchaser for whom it is
acting, if applicable, has no intention to distribute either directly or
indirectly any of the Special Warrants in the United States, except in
compliance with the U.S. Securities Act and any applicable state
securities laws;

International Subscribers

(p)
(i)	the Subscriber is not subject to Canadian Securities
Laws;
(ii)	the Subscriber is knowledgeable of, or has been
independently advised as to, the applicable securities laws of the
International Jurisdiction which would apply to this subscription, if
there are any;
(iii)	the Corporation is offering and selling the Special
Warrants and the Subscriber is purchasing the Special Warrants pursuant to
exemptions from the prospectus and registration requirements under the
applicable securities laws of the International Jurisdiction or, if such
is not applicable, the Corporation is permitted to offer and sell the
Special Warrants and the Subscriber is permitted to purchase the Special
Warrants under the applicable securities laws of such International
Jurisdiction without the need to rely on exemptions;
(iv)	the applicable securities laws of the International
Jurisdiction do not require the Corporation to prepare and/or file any
documents or be subject to ongoing reporting requirements or seek any approvals of any kind whatsoever
in respect of the offer and sale of the Special Warrants to the Subscriber
from any regulatory authority of any kind whatsoever in the International
Jurisdiction; and

11 -

(v) the Subscriber will, if requested by the Corporation, deliver to the Corporation a certificate or opinion of local counsel from the International Jurisdiction which will confirm the matters referred to in subparagraphs (iii) and (iv) above to the satisfaction of the Corporation, acting reasonably;

No Prospectus or Undisclosed Information

(q)
(i)	the Subscriber may be restricted from using some of the
protections, rights and remedies otherwise available under Canadian
Securities Laws, including statutory rights of rescission or damages in
the event of a misrepresentation;
(ii)	the Subscriber may not receive information that would
otherwise be required to be provided to it under Canadian Securities Laws;
and
(iii)	the Corporation is relieved from certain obligations that
would otherwise apply under Canadian Securities
Laws;

| (r) | the Subscriber has not received or been provided with a
prospectus, registration statement or offering memorandum, within the
meaning of Securities Laws, or any sales or advertising literature in
connection with the Offering. The Subscribers decision to subscribe for
the Special Warrants was not based upon, and the Subscriber has not relied
upon, any verbal or written representations as to fact made by or on
behalf of the Corporation or the Underwriters and their respective
directors, officers, employees, agents and representatives. The
Subscribers decision to subscribe for the Special Warrants was based
solely upon this Subscription Agreement, including the Term Sheet attached
hereto as Schedule A, and information about the Corporation which is
publicly available (any such information having been obtained by the
Subscriber without independent investigation or verification by the
Underwriters); |
| --- | --- |
| (s) | the Underwriters, its counsel, Baker & McKenzie LLP,
and counsel to the Corporation, Meretsky Law Firm, and their respective
directors, officers, employees, agents and representatives assume no
responsibility or liability of any nature whatsoever for the accuracy or
adequacy of any such publicly available information concerning the
Corporation or as to whether all information concerning the Corporation
that is required to be disclosed or filed by the Corporation under the
Securities Laws has been so disclosed or filed; |
| (t) | except for the Subscribers knowledge regarding its
subscription for Special Warrants hereunder, the Subscriber has no
knowledge of a material fact or a material change (as those terms are
defined in applicable Canadian Securities Laws) in the affairs of the
Corporation that has not been generally
disclosed; |

12 -

Investment Suitability

(u)
(i)	has such knowledge in financial and business affairs as
to be capable of evaluating the merits and risks of its investment in the
Securities;
(ii)	is capable of assessing the proposed investment in the
Securities as a result of the Subscribers own experience or as a result
of advice received from a person registered under applicable Canadian
Securities Laws;
(iii)	is aware of the characteristics of the Securities and the
risks relating to an investment therein; and
(iv)	is able to bear the economic risk of loss of its
investment in the Securities;

(v) the Subscriber understands that no securities commission, stock exchange, governmental agency, regulatory body or similar authority has made any finding or determination or expressed any opinion with respect to the merits of investing in the Special Warrants nor is there any government or other insurance covering the Special Warrants;

No Representations

(w)
(i)	regarding the future value of the Securities;
(ii)	that any person will resell or repurchase the Securities;
or
(iii)	that any person will refund the purchase price of the
Securities other than as provided in this Subscription
Agreement;

Limitations on Resale

(x) the Subscriber and, if applicable, each Disclosed Principal, understands that it may not be able to resell the Securities except in accordance with limited exemptions available under applicable Securities Laws, and that the Subscriber is solely responsible for (and neither the Corporation nor the Underwriters are in any way responsible for) the Subscribers and, if applicable, each Disclosed Principals compliance with applicable resale restrictions. The Subscriber will comply with all applicable Securities Laws concerning the subscription, purchase, holding and resale of the Securities and will not resell any of the Securities except in accordance with the provisions of applicable Securities Laws. The Subscriber acknowledges that it may not transfer Special Warrants to a U.S. Person or to a person in the United States or to or for the account or benefit of a U.S. Person or a person in the United States unless the Corporation consents in writing (such consent not to be unreasonably withheld or delayed) and, if requested by the Corporation, the Subscriber has delivered to the Corporation a written opinion of counsel reasonably satisfactory to the Corporation stating such transfer would comply with the provisions of applicable Securities Laws;

Legends

(y) the certificates representing (i) the Special Warrants, and (ii) the Common Shares and Warrants issued upon the exercise of the Special Warrants (if issued prior to the expiry of the applicable hold periods or the Qualification Date), and (iii) the Warrant Shares issued upon exercise of the Warrants (if the applicable Warrants and Warrant Shares are issued prior to the expiry of the applicable hold periods or the Qualification Date) will bear a legend substantially in the following form:

13 -

UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE .

and may also bear a legend substantially in the following form:

WITHOUT PRIOR WRITTEN APPROVAL OF THE TSX VENTURE EXCHANGE AND COMPLIANCE WITH ALL APPLICABLE SECURITIES LEGISLATION, THE SECURITIES REPRESENTED BY OR UNDERLYING THIS CERTIFICATE MAY NOT BE SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE TRADED ON OR THROUGH THE FACILITIES OF THE TSX VENTURE EXCHANGE OR OTHERWISE IN CANADA OR TO OR FOR THE BENEFIT OF A CANADIAN RESIDENT UNTIL .

In addition to the foregoing legends, the certificates representing Securities issued to Subscribers who are, or are subscribing for the account or benefit of, persons in the United States or U.S. Persons, will also bear the legends described in Schedule C of this Subscription Agreement.

Restrictions on Exercise in the United States

(z) the Subscriber understands that the Warrants may not be exercised in the United States or by or on behalf of a U.S. Person unless an exemption is available from the registration requirements of the U.S. Securities Act and all applicable state securities laws and, if requested by the Corporation, the holder has delivered to the Corporation a written opinion of counsel reasonably satisfactory to the Corporation to such effect; provided, however, that an original Subscriber in the Offering that is in the United States or a U.S. Person will not be required to deliver an opinion of counsel in connection with the exercise of Special Warrants or Warrants purchased in the Offering by such original Subscriber that is in the United States or a U.S. Person, on its own behalf or on behalf of the original beneficial purchaser (if any), at a time when it and such beneficial purchaser (if any) are U.S. Accredited Investors;

No Purchase or Offer in the United States

(aa) unless the Subscriber is, or is subscribing for the account or benefit of, a person in the United States or a U.S. Person and has duly completed and executed Schedule C hereto, neither the Subscriber nor any person for whom it is acting will (i) offer, sell or otherwise dispose of the Securities in the United States or to, or for the benefit or account of, a person in the United States or a U.S. Person, or (ii) exercise the Special Warrants or Warrants in the United States, unless the Corporation has consented to such offer, sale, disposition or exercise (such consent not to be unreasonably withheld or delayed) and such offer, sale, disposition or exercise is made in accordance with an exemption from the registration requirements under the U.S. Securities Act and the securities laws of all applicable states of the United States or the Corporation has filed, and the U.S. Securities and Exchange Commission has declared effective, a registration statement in respect of such Securities and, if applicable, has complied with the securities laws of all applicable states of the United States;

Not Proceeds of Crime

14 -

Personal Information

(cc)
(i)	(A) to conduct background checks, (B) to verify the
personal information that has been provided about each individual, (C) to
consider the suitability of the individual to act as an insider of an
issuer, (D) to provide disclosure to market participants as to the
security holdings of directors, officers, other insiders and promoters of
the issuer, or its associates or affiliates, (E) to conduct enforcement
proceedings, and (F) to perform other investigations as required by and to
ensure compliance with all applicable rules, policies, rulings and
regulations of the TSXV, securities legislation and other legal and
regulatory requirements governing the conduct and protection of the public
markets in Canada;
(ii)	as part of the above-mentioned process, the TSXV also
collects additional personal information from other sources, including but
not limited to, securities regulatory authorities in Canada or elsewhere,
investigative, law enforcement or self-regulatory organizations,
regulations services providers and each of their subsidiaries, affiliates,
regulators and authorized agents, to ensure that the purposes set out
above can be accomplished; and
(iii)	the personal information the TSXV collects may also be
disclosed:

No Financial Assistance

(dd) the Subscriber has not received and does not expect to receive any financial assistance from the Corporation directly or indirectly, in respect of the Subscribers purchase of the Special Warrants;

Future Financings

15 -

No Advertising

(ff) the Subscriber has not become aware of any advertisement in printed media of general and regular paid circulation or on radio, television or other form of telecommunication or any other form of advertisement (including electronic display or the Internet including but not limited to the Corporations website) or sales literature with respect to the distribution of the Special Warrants or any seminar or meeting whose attendees have been invited by general solicitation or general advertising;

No Other Fees

(gg) other than the Underwriters, the Subscriber confirms that there is no person acting or purporting to act on behalf of the Subscriber (including any Disclosed Principal), if applicable, in connection with the transactions contemplated herein who is entitled to any brokerage or finders fee. If any other person establishes a claim that any fee or other compensation is payable in connection with this subscription for the Special Warrants on account of the Subscribers subscription, the Subscriber covenants to indemnify and hold harmless the Corporation and the Underwriters with respect thereto and with respect to all costs reasonably incurred in the defence thereof;

Other Documents

Subscribers Responsibility for Legal and Financial Advice

Registration

16 -

Not a Control Person

(ll) neither the Subscriber nor, if applicable, any Disclosed Principal will become a control person of the Corporation by virtue of its subscription for Special Warrants hereunder and neither the Subscriber nor, if applicable, any Disclosed Principal intends to act in concert with any other person or persons to form a control group of the Corporation.

11. Reliance on Representations, Warranties, Covenants and Acknowledgements. The Subscriber acknowledges and agrees that the representations, warranties, covenants and acknowledgements made by the Subscriber in this Subscription Agreement, including the schedules hereto, are made with the intention that they may be relied upon by the Corporation, the Underwriters, the U.S. Affiliate and their respective counsel in determining the Subscribers eligibility (and, if applicable, the eligibility of others for whom the Subscriber is contracting hereunder) to purchase the Special Warrants under the Securities Laws. The Subscriber further agrees that by accepting the Special Warrants, the Subscriber shall be representing and warranting that such representations, warranties, acknowledgements and covenants are true as at the Closing Time with the same force and effect for the benefit of the Corporation, the Underwriters and the U.S. Affiliate as if they had been made by the Subscriber at the Closing Time and that they shall survive the purchase by the Subscriber of the Special Warrants and shall continue in full force and effect for the benefit of the Corporation, the Underwriters and the U.S. Affiliate notwithstanding any subsequent disposition by the Subscriber of any of the Securities.

12. Indemnity. The Subscriber acknowledges that the Corporation, the Underwriters, the U.S. Affiliate and their respective counsel are relying upon the representations, warranties, acknowledgements and covenants of the Subscriber set forth herein (including the schedules attached hereto) in determining the eligibility (from a securities law perspective) of the Subscriber (or, if applicable, the eligibility of another on whose behalf the Subscriber is contracting hereunder to subscribe for Special Warrants) to purchase Special Warrants under the Offering, and hereby agrees to indemnify the Corporation, the Underwriters, the U.S. Affiliate and their respective directors, officers, employees, advisers, affiliates, shareholders, representatives and agents (including their respective legal counsel) against all losses, claims, costs, expenses, damages or liabilities that they may suffer or incur as a result of or in connection with their reliance on such representations, warranties, acknowledgements and covenants. The Subscriber undertakes to immediately notify the Corporation, the Underwriters and the U.S. Affiliate of any change in any statement or other information relating to the Subscriber set forth herein that occurs prior to the Closing Time. To the extent that any person entitled to be indemnified hereunder is not a party to this Subscription Agreement, the Corporation, the Underwriters and the U.S. Affiliate, as the case may be, shall obtain and hold the rights and benefits of this Subscription Agreement in trust for, and on behalf of, such person, and such person shall be entitled to enforce the provisions of this section notwithstanding that such person is not a party to this Subscription Agreement.

13. Contractual Right of Action for Rescission. In the event that a holder of Special Warrants acquires Common Shares or Warrants upon the exercise of the Special Warrants and is or becomes entitled under Canadian Securities Laws to the remedy of rescission by reason of the (final) short form prospectus to be filed by the Corporation in connection herewith or any amendment thereto containing a misrepresentation, such holder will be entitled to rescission with respect to both the exercise of the Special Warrants and the private placement transaction under which the Special Warrants were initially acquired, and will be entitled in connection with such rescission to a full refund from the Corporation of the amount of the Aggregate Subscription Price paid in respect of the Special Warrants. The provisions hereof are a direct contractual right extended by the Corporation alone (but specifically not by the directors, officers or agents of the Corporation or by the Underwriters) to the Subscriber, permitted assignees of the Special Warrants and to holders of the Common Shares or Warrants acquired by such holders on exercise of the Special Warrants, and are in addition to any other right or remedy available to a holder of the Special Warrant under section 130 of the Securities Act (Ontario), and equivalent provisions of the securities legislation of any province or territory in which such holder resides or otherwise at law.

The Corporation agrees that the benefit of the covenant contained in the first paragraph of this section 13 will be deemed to have passed with any permitted assignment or transfer of the Special Warrants in accordance with the terms thereof and the Corporation agrees to explicitly extend the benefit of such covenant to any permitted assignee or transferee of the Special Warrants as if it were the original subscriber.

17 -

The foregoing contractual rights of action for rescission will be subject to the defences, limitations and other provisions described under section 130 of the Securities Act (Ontario) and the equivalent provisions of the securities legislation of any jurisdiction in which any Subscriber of the Special Warrants resides, each of which is incorporated herein by reference. No action may be commenced to enforce the foregoing rights of action for rescission more than 180 days after payment is made for the Special Warrants.

14. Underwriters Commissions. The Subscriber understands that in connection with the issue and sale of the Special Warrants pursuant to the Offering, the Underwriters will receive from the Corporation a commission equal to 6.0% of the gross proceeds received by the Corporation from the Offering.

15. Subscribers Costs. The Subscriber acknowledges and agrees that all costs incurred by the Subscriber (including any fees and disbursements of any counsel retained by the Subscriber) relating to the sale of the Special Warrants to the Subscriber shall be borne by the Subscriber.

16. Notices. Any notice, direction or other instrument required or permitted to be given to any party hereto shall be in writing and shall be sufficiently given if delivered personally or by courier or transmitted by facsimile or other form of electronic communication during the transmission of which no indication of failure of receipt is communicated to the sender and for which evidence of delivery is obtained, as follows:

(a) in the case of the Corporation, to:

Sphere 3D Corporation 240 Matheson Blvd. East Mississauga, ON L4Z 1X

Attention: Scott Worthington, CFO Facsimile: (905) 282-9966 Email: [email protected]

(b) in the case of the Subscriber, at the address and facsimile number specified on the face page hereof, with a copy to:

Cormark Securities Inc. Royal Bank Plaza, South Tower 200 Bay Street, Suite 2800 Toronto, ON M5J 2J2

Attention: Jeff Kennedy Fax: (416) 943-6499 Email: [email protected]

18 -

17. Interpretation. The headings used in this Subscription Agreement have been inserted for convenience of reference only and shall not affect the meaning or interpretation of this Subscription Agreement or any provision hereof. Words importing the singular number only shall include the plural and vice versa. In this Subscription Agreement, unless otherwise indicated, all references to money amounts are to Canadian dollars.

18. No Partnership. Nothing herein shall constitute or be construed to constitute a partnership of any kind whatsoever between the Subscriber and the Corporation.

19. Governing Law. The contract arising out of acceptance of this Subscription Agreement by the Corporation shall be governed by and construed in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable therein. The parties irrevocably attorn to the jurisdiction of the courts of the Province of Ontario.

20. Time of Essence. Time shall be of the essence of this Subscription Agreement.

21. Entire Agreement. This Subscription Agreement represents the entire agreement of the parties hereto relating to the subject matter hereof, and there are no representations, covenants or other agreements relating to the subject matter hereof except as stated or referred to herein.

22. Electronic Copies. The Corporation shall be entitled to rely on delivery of a facsimile or portable document format ( pdf ) copy of executed subscriptions, and acceptance by the Corporation of such facsimile or pdf subscriptions shall be legally effective to create a valid and binding agreement between the Subscriber and the Corporation in accordance with the terms hereof.

23. Counterpart. This Subscription Agreement may be executed in one or more counterparts each of which so executed shall constitute an original and all of which together shall constitute one and the same agreement. Delivery of counterparts may be effected by facsimile or pdf transmission thereof.

24. Severability. The invalidity, illegality or unenforceability of any provision of this Subscription Agreement shall not affect the validity, legality or enforceability of any other provision hereof.

25. Enurement. This Subscription Agreement shall be binding upon and enure to the benefit of the parties hereto and their respective heirs, executors, administrators, successors (including any successor by reason of the amalgamation or merger of any party) and permitted assigns.

26. Assignment. Neither party may assign all or part of its interest in or to this Subscription Agreement without the consent of the other party in writing.

27. Amendment. Except as otherwise provided herein, this Subscription Agreement may only be amended by the parties hereto in writing.

28. Further Assurances. Each party hereto from time to time at the request of the other party hereto, whether before or after Closing Time, shall do such further acts and execute and deliver such further instruments, deeds and documents as shall be reasonably required in order to fully perform and carry out the provisions of this Subscription Agreement. The parties hereto agree to act honestly and in good faith in the performance of their respective obligations hereunder.

29. Language. The Subscriber acknowledges that it has consented to and requested that all documents evidencing or relating in any way to the sale of the Special Warrants be drawn up in the English language only. Le souscripteur reconnaît par les présentes avoir consenti et exigé que tous les documents faisant foi ou se rapportant de quelque manière à la vente des bons de unités soient rédigés en anglais seulement.

19 -

SCHEDULE A
TERM SHEET
SPHERE 3D CORPORATION

Issuer:	Sphere 3D Corporation (the Company ).
Offering:	Treasury offering of 1,176,500 special warrants (the
Special Warrants ) before giving effect to the Underwriters
Option.
Issue Price:	$8.50 per Special Warrant.
Gross Proceeds:	$10,000,250.
Underwriters Option	The Company has granted the Underwriters an option (the
Underwriters Option ), exercisable in whole or in part, at the
Issue Price at any time until the closing of the Offering, to purchase up
to an additional 15% of the Offering (176,475 Special Warrants).
Special Warrants:	Each Special Warrant shall be issued under a special
warrant indenture and shall entitle the holder thereof to receive, subject
to adjustment in certain circumstances and the Penalty Provision (as
defined below) and without payment of additional consideration, one unit
of the Company (a Unit ). Each Unit will be comprised of one
common share (a Common Share ) in the capital of the
Company and one-half of one Common Share purchase warrant (each full
warrant, a Warrant ). Each Warrant will entitle the holder to
acquire one Common Share at a price of $11.50 for a period of two years
following the Closing Date (as defined below). The Special Warrants will
be exercisable by the holders thereof at any time after the Closing Date
for no additional consideration.
	All unexercised Special Warrants shall be deemed
exercised on behalf of, and without any required action on the part of,
the holders (including payment of additional consideration) at the earlier
of:

| (i) | the third business day following the date on which a
final receipt (the Final Receipt ) is obtained from the Ontario
Securities Commission (the OSC ), on behalf of the securities
regulatory authorities in each of the Canadian Offering Jurisdictions (as
defined below), for the filing of a (final) short form prospectus (the
Final Prospectus ) pursuant to National Instrument 44-101
qualifying for distribution the Common Shares and Warrants to be issued
upon exercise or deemed exercise of the Special Warrants (the
Qualification Date ); and |
| --- | --- |
| (ii) | 4:59 p.m. (Toronto time) on the date which is four months
and a day following the Closing Date. |

If the Qualification Date has not occurred on or before July 31, 2014 (the Qualification Deadline ), each Special Warrant shall thereafter entitle the holder to receive upon exercise, for no additional consideration, 1.05 Units (the Penalty Provision ). The Units issuable pursuant to the Penalty Provision shall be qualified under the Final Prospectus. In the event that the Company fails to obtain the Final Receipt by the Qualification Deadline, the Company shall continue to use its best efforts to obtain the Final Receipt as soon as possible following the Qualification Deadline.

A - 2

| Use of Proceeds: | The net proceeds of the Offering will be used to advance
to Overland Storage Inc. ( Overland ) an interim financing loan and
for working capital purposes. |
| --- | --- |
| Offering Jurisdictions: | Offered on an underwritten private placement basis in:
(i) each of the Provinces of British Columbia, Alberta, Ontario and such
other provinces and territories of Canada as may be agreed by the Lead
Underwriter and the Company (the Canadian Offering Jurisdictions ); (ii) the United States on a private placement
basis pursuant to an exemption from the registration requirements of the United States Securities Act of 1933 , as amended; and (iii)
jurisdictions outside of Canada and the United States, in each case in
accordance with all applicable laws provided that no prospectus,
registration statement or similar document is required to be filed in such
jurisdiction. |
| Listing: | Application will be made to list the Common Shares
underlying the Special Warrants and the Common Shares underlying the
Warrants on the TSX Venture Exchange (the TSXV ). The existing
common shares of the Company are listed on the TSXV under the symbol
ANY. |
| Reporting Issuer and Resale: | The Company is currently a reporting issuer under
securities legislation in Ontario, Alberta and British Columbia. Until the
Final Receipt is obtained, the Special Warrants (and any underlying
securities) will be subject to a statutory hold period in Canada which
extends to four months and one day after the Closing Date. |
| Eligibility: | Eligible for RRSPs, RRIFs and TFSAs. |
| Commission: | 6% of the gross proceeds from the sale of the Special
Warrants (including any exercise of the Underwriters Option). |
| Black-Out Period: | The Company agrees not to issue any Common Shares or
securities convertible into Common Shares for a period of 120 days from
the closing of the Offering without the prior written consent of the Lead
Underwriter, in all cases such consent not to be unreasonably withheld or
delayed, except in conjunction with: (i) the grant or exercise of stock
options and other similar issuances pursuant to the share incentive plan
of the Company and other share compensation arrangements; (ii) the
exercise of outstanding warrants or convertible debt (including for
greater certainty, the convertible debentures issued by the Company to
Cyrus Capital L.P. and/or its affiliates (collectively, Cyrus ) on
March 21, 2014); (iii) the supply agreement dated July 21, 2013 between
Overland and the Company; (iv) the acquisition of V3 Systems Inc. and
transactions related thereto; and (v) the acquisition of Overland and
transactions related thereto as more particularly set forth in the
Agreement and Plan of Merger dated May 15, 2014 (including, for greater
certainty, in connection with issuance of or assumption of the convertible
debentures issued by Overland to Cyrus). |
| Closing Date: | On or before June 3, 2014. |

SCHEDULE B
NON-U.S.
SUBSCRIBER CERTIFICATE

| TO: | S PHERE 3D
C ORPORATION (the Corporation) |
| --- | --- |
| AND TO: | C ORMARK S ECURITIES I NC ., J ACOB S ECURITIES I NC . AND P ARADIGM C APITAL I NC . |
| | (collectively, the
Underwriters) |

In connection with the purchase of special warrants ( Special Warrants ) of the Corporation by the Subscriber, the Subscriber represents, warrants and covenants (on its own behalf and, if applicable, on behalf of those for whom the Subscriber is contracting under the Subscription Agreement) and certifies to the Corporation and acknowledges that the Corporation is relying thereon that:

General

A.
(i)	the Subscriber is resident in or otherwise subject to the
laws of the jurisdiction set out as the Subscribers Residential Address
on the face page of the Subscription Agreement and is purchasing as
principal for its own account and not for the benefit of any other
person;
(ii)	the Subscriber is contracting hereunder on behalf of a
Disclosed Principal and such Disclosed Principal is resident in or
otherwise subject to the laws of the jurisdiction set out as the
Disclosed Principals Residential Address on the face page of the
Subscription Agreement and is purchasing as principal for its own account
and not for the benefit of any other person; or
(iii)	the Subscriber is deemed to be purchasing as principal
pursuant to NI 45-106 with respect to a purchase of the Special Warrants,
by virtue of the fact that it is a trust company or trust corporation
described in clause (p) of the definition of accredited investor in
Section B below and is not a trust company or trust corporation registered
under the laws of Prince Edward Island that is not registered or
authorized under the Trust and Loan Companies Act (Canada) or under
comparable legislation in another jurisdiction of Canada, or by virtue of
the fact that it is a person or company described in clause (q) of the
definition of accredited investor in clause B below; and

Prospectus Exemptions

B.
(i)	the Subscriber or the Disclosed Principal, as applicable,
is, as of the date hereof, and will be, as of the Closing Date, an
accredited investor, as such term is defined in NI 45-106, by virtue of
the fact that the Subscriber or the Disclosed Principal, as applicable,
falls within one or more of the following categories checked
below :

| (c) | a subsidiary of any person referred to in paragraphs (a)
or (b), if the person owns all of the voting securities of the subsidiary,
except the voting securities required by law to be owned by directors of
that subsidiary; | |
| --- | --- | --- |
| (d) | a person registered under the securities legislation of a
jurisdiction of Canada as an adviser or dealer, other than a person
registered solely as a limited market dealer under one or both of the Securities Act (Ontario) or the Securities Act (Newfoundland
and Labrador); | [ ] |
| (e) | an individual registered or formerly registered under the
securities legislation of a jurisdiction of Canada as a representative of
a person referred to in paragraph (d); | [ ] |
| (f) | the Government of Canada or a jurisdiction of Canada, or
any crown corporation, agency or wholly owned entity of the Government of
Canada or a jurisdiction of Canada; | [ ] |
| (g) | a municipality, public board or commission in Canada and
a metropolitan community, school board, the Comité de gestion de la taxe
scolaire de lîle de Montréal or an intermunicipal management board in
Québec; | [ ] |
| (h) | any national, federal, state, provincial, territorial or
municipal government of or in any foreign jurisdiction, or any agency of
that government; | [ ] |
| (i) | a pension fund that is regulated by the Office of the
Superintendent of Financial Institutions (Canada) or a pension commission
or similar regulatory authority of a jurisdiction of Canada; | [ ] |
| (j) | an individual who, either alone or with a spouse,
beneficially owns financial assets having an aggregate realizable value
that before taxes, but net of any related liabilities, exceeds
$1,000,000; | [ ] |
| (k) | an individual whose net income before taxes exceeded
$200,000 in each of the 2 most recent calendar years or whose net income
before taxes combined with that of a spouse exceeded $300,000 in each of
the 2 most recent calendar years and who, in either case, reasonably
expects to exceed that net income level in the current calendar
year; | [ ] |
| (l) | an individual who, either alone or with a spouse, has net
assets of at least $5,000,000; | [ ] |
| (m) | a person, other than an individual or investment fund,
that has net assets of at least $5,000,000 as shown on its most recently
prepared financial statements (prepared in accordance with applicable
generally accepted accounting principles), and that was not created or
used solely to purchase or hold the Special Warrants as an accredited
investor; | [ ] |
| (n) | an investment fund that distributes or has distributed
its securities only to | [ ] |
| | (i) | a person that is or was an accredited investor at the
time of the distribution, |
| | (ii) | a person that acquires or acquired securities in the
circumstances referred to in sections 2.10 [Minimum amount
investment] , or 2.19 [Additional investment in investment funds] of NI 45-106, or |
| | (iii) | a person described in paragraph (i) or (ii) that acquires
or acquired securities under section 2.18 [Investment fund
reinvestment] of NI 45-106, |
| (o) | an investment fund that distributes or has distributed
securities under a prospectus in a jurisdiction of Canada for which the
regulator or, in Québec, the securities regulatory authority, has issued a
receipt; | [ ] |
| (p) | a trust company or trust corporation registered or
authorized to carry on business under the Trust and Loan Companies Act (Canada) or under comparable legislation in a jurisdiction of Canada
or a foreign jurisdiction, acting on behalf of a fully managed account
managed by the | [ ] |

| (q) | trust company or trust corporation, as the case may
be; — a person acting on behalf of a fully managed account
managed by that person, if that person | [ ] |
| --- | --- | --- |
| | (i) | is registered or authorized to carry on business as an
adviser or the equivalent under the securities legislation of a
jurisdiction of Canada or a foreign jurisdiction, and |
| | (ii) | in Ontario, is purchasing a security that is not a
security of an investment fund; |
| (r) | a registered charity under the Income Tax Act (Canada) that, in regard to the trade, has obtained advice from an
eligibility adviser or an adviser registered under the securities
legislation of the jurisdiction of the registered charity to give advice
on the securities being traded; | [ ] |
| (s) | an entity organized in a foreign jurisdiction that is
analogous to any of the entities referred to in paragraphs (a) to (d) or
paragraph (i) in form and function; | [ ] |
| (t) | a person in respect of which all of the owners of
interests, direct, indirect or beneficial, except the voting securities
required by law to be owned by directors, are persons that are accredited
investors; | [ ] |
| (u) | an investment fund that is advised by a person registered
as an adviser or a person that is exempt from registration as an adviser;
or | [ ] |
| (v) | a person that is recognized or designated by the
securities regulatory authority or, except in Ontario and Québec, the
regulator as an accredited investor; or | [ ] |

(ii) if not purchasing under clause (i), above, the Aggregate Subscription Price of the Special Warrants purchased by the Subscriber or the Disclosed Principal, as the case may be, is not less than $150,000 paid in cash at the time of the distribution and the Subscriber or the Disclosed Principal, as the case may be, has not been created or used solely to purchase or hold securities in reliance on this exemption.

Dated: ______, 2014
	Name of Subscriber
Name of witness (if the Subscriber is an individual)	Signature of Subscriber
Signature of witness	If the Subscriber is a corporation, print name
and
	title of Authorized Signing Officer

SCHEDULE C
UNITED STATES
SUBSCRIBERS REPRESENTATION LETTER

This Representation Letter is being delivered in connection with the execution and delivery of the Subscription Agreement of the undersigned subscriber (the Subscriber ) in connection with the purchase of Special Warrants (the Special Warrants and, together with the Units, the Common Shares forming part of the Units, the Warrants and the Warrant Shares, collectively, the Securities ) of Sphere 3D Corporation (the Corporation ). Capitalized terms used herein and not defined herein will have the meanings ascribed thereto in the Subscription Agreement. The Subscriber represents, warrants and covenants (which representations, warranties and covenants will survive the Closing Date) on its own behalf and, if applicable, on behalf of any beneficial purchaser for whom the Subscriber is contracting hereunder to and with the Corporation, the Underwriters and the U.S. Affiliate and acknowledges that the Corporation, the Underwriters, U.S. Affiliate and their respective counsel are relying thereon that:

| (a) | The Subscriber is (i) purchasing the Special Warrants as
principal for its own account and not for the benefit of any other Person
and it is an institutional accredited investors who satisfies one or
more of the criteria of Rule 501(a)(1), (2), (3) or (7) of Regulation D
under the U.S. Securities Act) (a U.S. Accredited Investor ); or
(ii) subscribing for the Special Warrants as agent for a beneficial
purchaser disclosed on the execution page of this Subscription Agreement,
in a transaction in which the Subscriber is exercising sole investment
discretion with respect to the purchase of the Special Warrants and the
Subscriber and each disclosed purchaser for whom it is acting is a U.S.
Accredited Investor and is purchasing as principal for its own account and
not for the benefit of any other person; and the Subscriber has initialled
the category of U.S. Accredited Investor applicable to the Subscriber and
any beneficial purchaser below. |
| --- | --- |
| (b) | The Subscriber (and, if the Subscriber is acting on
behalf of a beneficial purchaser, such beneficial purchaser) is a U.S.
Accredited Investor as a result of satisfying the requirements of the
paragraphs below that the Subscriber has indicated ( the line identified
as BP is to be initialled by the undersigned if the beneficial
purchaser, if any, satisfies the requirements of the corresponding
paragraph ). |

| __ | any bank as defined in Section
3(a)(2) of the U.S. Securities Act or any savings and loan |
| --- | --- |
| | association or other institution
as defined in Section 3(a)(5)(A) of the U.S. Securities Act |
| _(BP) | whether acting in its individual
or fiduciary capacity; |
| | any broker or dealer registered
pursuant to Section 15 of the Securities Exchange Act of |
| | 1934; |
| (BP) | |
| | any insurance company as defined
in Section 2(a)(13) of the U.S. Securities Act; |
| (BP) | |
| | any investment company registered
under the Investment Company Act of 1940, or a |
| | business
development company as defined in Section 2(a)(48) of that Act; |
| (BP) | |
| | any Small Business Investment
Company licensed by the U.S. Small Business |
| | Administration under Section
301(c) or (d) of the Small Business Investment Act of 1958; |
| (BP) | |
| | any plan established and
maintained by a state, its political subdivisions, or any agency or |
| | instrumentality of a state or its
political subdivisions, for the benefit of its employees, if |
| ___(BP) | such plan has total assets in
excess of US$5,000,000; |

| __ | any employee benefit plan within
the meaning of the Employee Retirement Income |
| --- | --- |
| | Security Act of 1974, if the
investment decision is made by a plan fiduciary, as defined in |
| _(BP) | Section 3(21) of such Act, which
is either a bank, savings and loan association, insurance |
| | company, or registered investment
adviser, or if the employee benefit plan has total assets |
| | in excess of US$5,000,000, or, if
a self-directed plan, with investment decisions made |
| | solely by persons that are U.S.
Accredited Investors; |
| | any private business development
company as defined in Section 202(a)(22) of the |
| | Investments Advisers Act of 1940; |
| (BP) | |
| | any organization described in
section 501(c)(3) of the Internal Revenue Code of 1986, |
| | corporation, Massachusetts or
similar business trust, or partnership not formed for the |
| (BP) | specific purpose of acquiring the
Special Warrants, with total assets in excess of |
| | US$5,000,000; or |
| | any trust with total assets in
excess of US$5,000,000, not formed for the specific purpose of |
| | acquiring the Special Warrants,
whose purchase is directed by a sophisticated person, being |
| ___(BP) | defined as a person who has such
knowledge and experience in financial and business |
| | matters that he or she is capable
of evaluating the merits and risks of the prospective |
| | investment. |

| (c) | The Subscriber has not purchased the Special Warrants as
a result of any form of general solicitation or general advertising
(as those terms are used in Rule 502(c) of Regulation D), including,
without limitation, advertisements, articles, notices or other
communications published in any newspaper, magazine or similar media or
the Internet or broadcast over radio, television, or the Internet or any
seminar or meeting whose attendees have been invited by general
solicitation or general advertising. |
| --- | --- |
| (d) | The Subscriber has had access to such information
concerning the Corporation as it has considered necessary or appropriate
in connection with its investment decision to acquire the Special Warrants
and has such knowledge and experience in financial and business matters as
to be capable of evaluating the merits and risks of its investment and it
is able to bear the economic risk of loss of its investment in the Special
Warrants. |
| (e) | The Subscriber understands and acknowledges that none of
the Securities have been or will be registered under the U.S. Securities
Act or the securities laws of any state, and that the Special Warrants are
being offered and sold to a limited number of U.S. Accredited Investors in
transactions exempt from registration under the U.S. Securities Act and
applicable state securities laws; accordingly, the Securities are or will
be when issued, as applicable, restricted securities within the meaning
of Rule 144(a)(3) of the U.S. Securities Act. |
| (f) | The Subscriber, and each beneficial purchaser, if any, is
acquiring the Special Warrants for investment purposes only and not with a
view to any resale, distribution or other disposition of Special Warrants
in violation of United States federal or state securities laws, and the
Subscriber acknowledges that the exemption from registration under the
U.S. Securities Act and applicable state securities laws depends, among
other things, upon the bona fide nature of the investment intent
expressed herein. |
| (g) | The Subscriber understands that if it (or any beneficial
purchaser on whose behalf it is acting) decides to offer, sell, pledge or
otherwise transfer any of the Securities they may be offered, sold,
pledged or otherwise transferred only (i) to the Corporation, (ii) outside
the United States in compliance with Rule 904 of Regulation S and in
compliance with applicable local laws and regulations, (iii) pursuant to a registration statement
that has been declared effective under the U.S. Securities Act and is
available for resale of the Securities, or (iv) in compliance with an
exemption from registration under the U.S. Securities Act including Rule
144 or Rule 144A thereunder, if available, and, in each case, in
compliance with any applicable state securities laws. The Subscriber
further understands and agrees that in the event of a transfer pursuant to
the foregoing clause (ii) or (iv), the Corporation will require a legal
opinion of counsel of recognized standing, or other evidence, reasonably
satisfactory to the Corporation that such transfer is exempt from
registration under the U.S. Securities Act and applicable state securities
laws. |

THE SECURITIES REPRESENTED HEREBY [AND IF SPECIAL WARRANTS OR WARRANTS, THE FOLLOWING SHALL BE ADDED: AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF] HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE U.S. SECURITIES ACT) OR ANY STATE SECURITIES LAWS, AND MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (A) TO THE CORPORATION (B) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE U.S. SECURITIES ACT AND IN COMPLIANCE WITH LOCAL LAWS AND REGULATIONS, (C) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE U.S. SECURITIES ACT AND IS AVAILABLE FOR RESALE OF THE SECURITIES, OR (D) IN COMPLIANCE WITH AN EXEMPTION FROM REGISTRATION UNDER THE U.S. SECURITIES ACT, INCLUDING RULE 144 OR RULE 144A THEREUNDER, IF AVAILABLE, AND, IN EACH CASE, IN COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES LAWS. THE HOLDER FURTHER UNDERSTANDS AND AGREES THAT IN THE EVENT OF A TRANSFER PURSUANT TO THE FOREGOING CLAUSE (B) OR (D), THE CORPORATION WILL REQUIRE A LEGAL OPINION OF COUNSEL OF RECOGNIZED STANDING OR OTHER EVIDENCE REASONABLY SATISFACTORY TO THE CORPORATION THAT SUCH TRANSFER IS EXEMPT FROM REGISTRATION UNDER THE U.S. SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. DELIVERY OF THIS CERTIFICATE MAY NOT CONSTITUTE GOOD DELIVERY IN SETTLEMENT OF TRANSACTIONS ON STOCK EXCHANGES IN CANADA.

provided further, that if any of the Securities are being sold pursuant to Rule 144 under the U.S. Securities Act and in compliance with any applicable state securities laws, the legend may removed by delivery to the Corporations registrar and transfer agent of an opinion satisfactory to the Corporation and its registrar and transfer agent to the effect that the legend is no longer required under applicable requirements of the U.S. Securities Act or applicable state securities laws.

| (i) | The Subscriber understands that the Special Warrants and
Warrants may not be exercised in the United States or by or on behalf of a
U.S. Person unless an exemption is available from the registration
requirements of the U.S. Securities Act and all applicable state
securities laws and the holder has delivered to the Corporation a written
opinion of counsel reasonably satisfactory to the Corporation to such
effect; provided, however, that an original Subscriber in the Offering
that is in the United States or a U.S. Person will not be required to
deliver an opinion of counsel in connection with the exercise of Special
Warrants or Warrants purchased or acquired in the Offering by such
original Subscriber that is in the United States or a U.S. Person, on its
own behalf or on behalf of the original beneficial purchaser (if any), at
a time when it and such beneficial purchaser (if any) are U.S. Accredited
Investors. |
| --- | --- |
| (j) | The Subscriber understands that all certificates
representing the Warrants will bear the following
legend: |

| (k) | The Subscriber consents to the Corporation making a
notation on its records or giving instruction to the registrar and
transfer agent of the Corporation in order to implement the restrictions
on transfer and exercise with respect to the Securities set forth and
described herein. |
| --- | --- |
| (l) | The Subscriber understands that the Corporation (i) is
under no obligation to remain a foreign issuer (as defined in Rule
902(e) of Regulation S), (ii) may not be a foreign issuer at a time when
the Subscriber wishes to transfer the Securities, and (iii) may engage in
one or more transactions which could cause the Corporation not to be a
foreign issuer. The Subscriber further understands and acknowledges that
the loss of the Corporations foreign issuer status would impede the
Subscribers ability to remove the restrictive U.S. legend from the
Securities in connection with any resale outside the United
States. |
| (m) | The Subscriber understands that the Corporation is not
obligated to file and, except as disclosed in its publicly filings made on
SEDAR (www.sedar.com), has no present intention of filing with the U.S.
Securities and Exchange Commission or with any state securities
administrator any registration statement in respect of resales of the
Securities in the United States. |
| (n) | The Subscriber understands and agrees that the financial
statements of the Corporation have been prepared in accordance with
International Financial Reporting Standards, which differ in some respects
from United States generally accepted accounting principles, and thus may
not be comparable to financial statements of United States
companies. |
| (o) | The Subscriber understands and agrees that there may be
material tax consequences to it of an acquisition, holding, exercise or
disposition of the Securities. The Corporation gives no
opinion and makes no representation with respect to the tax
consequences to the Subscriber under United States, state, local or
foreign tax law of its acquisition, holding , exercise or
disposition of the Securities, and the Subscriber acknowledges that it is
solely responsible for determining the tax consequences to it with respect
to its investment, including whether the Corporation will at any given
time be deemed a passive foreign investment company within the meaning
of Section 1297 of the United States Internal Revenue Code of 1986, as
amended. |

| (p) | The Subscriber is aware that its ability to enforce civil
liabilities under the United States federal securities laws may be
affected adversely by, among other things: (i) the fact that the
Corporation is organized under the laws of Canada; (ii) some or all of the
directors and officers may be residents of countries other than the United
States; and (iii) all or a substantial portion of the assets of the
Corporation and such persons may be located outside the United
States. |
| --- | --- |
| (q) | The office or other address of the Subscriber at which
the Subscriber received and accepted the offer to purchase the Special
Warrants is the address listed as the Subscribers Residential
Address on the face page of the Subscription Agreement. |
| (r) | that the funds representing the Aggregate Subscription
Price which will be advanced by the Subscriber to the Corporation
hereunder will not represent proceeds of crime for the purposes of the Uniting and Strengthening America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism Act (the PATRIOT
Act ) and the Subscriber acknowledges that the Issuer may in the
future be required by law to disclose the Subscriber's name and other
information relating to the subscription agreement and the Subscriber's
subscription hereunder, on a confidential basis, pursuant to the PATRIOT
Act. No portion of the Aggregate Subscription Price to be provided by the
Subscriber (i) has been or will be derived from or related to any activity
that is deemed criminal under the laws of the United States, or any other
jurisdiction, or (ii) is being tendered on behalf of a person or entity
who has not been identified to or by the Subscriber, and it shall promptly
notify the Issuer if the Subscriber discovers that any of such
representations ceases to be true and provide the Issuer with appropriate
information in connection therewith |
| (s) | The provisions of this Representation Letter will be true
and correct both as of the date of execution of this Subscription
Agreement and as of the Closing Date. |

DATED at ________this ___ day of , 2014.

If a Corporation, Partnership or Other Entity :

Name of Entity
Type of Entity
Signature of Person Signing
Print or Type Name and Title of Person Signing

ANNEX A TO SCHEDULE C

FORM OF DECLARATION FOR REMOVAL OF LEGEND

TO:	Sphere 3D Corporation
AND TO:	The registrar and transfer agent
for the securities of Sphere 3D Corporation

DATED at ____ this _day of ___, 20.

By: _________ Name: Title:

AFFIRMATION BY SELLERS BROKER-DEALER (REQUIRED FOR SALES IN ACCORDANCE WITH SECTION (B)(2)(B) ABOVE)

We have read the foregoing representations of our customer, ____(the Seller) dated ________, with regard to our sale, for such Sellers account, of the securities of the Company described therein, and on behalf of ourselves we certify and affirm that (A) we have no knowledge that the transaction had been prearranged with a buyer in the United States, (B) the transaction was executed on or through the facilities of the TSX Venture Exchange, (C) neither we, nor any person acting on our behalf, engaged in any directed selling efforts in connection with the offer and sale of such securities, and (D) no selling concession, fee or other remuneration is being paid to us in connection with this offer and sale other than the usual and customary brokers commission that would be received by a person executing such transaction as agent. Terms used herein have the meanings given to them by Regulation S under the U.S. Securities Act.

_______________ Name of Firm

__________
Authorized officer

SCHEDULE D
SUBSCRIBER
INFORMATION SHEET

INFORMATION TO BE COMPLETED BY EACH SUBSCRIBER:

A Registration Form

B. Present Ownership of Securities

The Subscriber either [check appropriate box] :

| [ ] | does not own directly or indirectly, or exercise control
or direction over, any common shares of the Corporation or securities
convertible into common shares of the Corporation; or |
| --- | --- |
| [ ] | owns directly or indirectly, or exercises control or
direction over, outstanding common shares of the Corporation and
convertible securities entitling the Subscriber to acquire additional
common shares of the Corporation which, if converted, in the aggregate
would represent common shares of the Corporation. |

C. Insider Status

The Subscriber either [check appropriate box] :

[ ] is an Insider of the Corporation as defined in the policies of the TSXV as follows:

[ ] is not an Insider of the Corporation.

D. Member of Pro Group

The Subscriber either [check appropriate box] :

[ ] is a member of the Pro Group as defined in the Rules of the TSXV, as follows:

[ ] is not a member of the Pro Group.

APPENDIX A TO SCHEDULE D

TSX VENTURE EXCHANGE PRIVATE PLACEMENT FORM

FORM 4C CORPORATE PLACEE REGISTRATION FORM

1.	Placee Information:
	(a)	Name:
__________________
	(b)	Complete Address:
______________
	(c)	Jurisdiction of Incorporation or Creation:
__________
2.	(a)	Is the Placee purchasing securities as a portfolio manager:
(Yes/No)?_______
	(b)	Is the Placee carrying on business as a portfolio manager
outside of Canada: (Yes/No)?_____
3.	If the answer to 2(b) above was Yes, the undersigned
certifies that:
	(a)	it is purchasing securities of the Corporation on behalf
of managed accounts for which it is making the investment decision to
purchase the securities and has full discretion to purchase or sell
securities for such accounts without requiring the clients express
consent to a transaction;
	(b)	it carries on the business of managing the investment
portfolios of clients through discretionary authority granted by those
clients (a portfolio manager business) in ________
[jurisdiction], and it is permitted by law to carry on a portfolio manager
business in that jurisdiction;
	(c)	it was not created solely or primarily for the purpose of
purchasing securities of the Corporation;
	(d)	the total asset value of the investment portfolios it
manages on behalf of clients is not less than $20,000,000; and
	(e)	it has no reasonable grounds to believe, that any of the
directors, senior officers and other insiders of the Corporation, and the
persons that carry on investor relations activities for the Corporation
has a beneficial interest in any of the managed accounts for which it is
purchasing.

If the answer to 2(a). above was No, please provide the names and addresses of Control Persons of the Placee:

Name * City Province or State Country

If the Control Person is not an individual, provide the name of the individual that makes the investment decisions on behalf of the Control Person.

| 5. — (a) | Personal Information means any information about
an identifiable individual, and includes information contained in sections
1, 2 and 4, as applicable, of this Form. | |
| --- | --- | --- |
| | The undersigned hereby acknowledges and agrees that it
has obtained the express written consent of each individual to: | |
| | (i) | the disclosure of Personal Information by the undersigned
to the Exchange (as defined in Appendix 6B) pursuant to this Form;
and |
| | (ii) | the collection, use and disclosure of Personal
Information by the Exchange for the purposes described in Appendix 6B or
as otherwise identified by the Exchange, from time to time. |
| (b) | The undersigned acknowledges that it is bound by the
provisions of applicable Securities Law, including provisions concerning
the filing of insider reports and reports of
acquisitions. | |

Dated and certified (if applicable), acknowledged and agreed, at ______on ________.

(Name of Purchaser - please print)
(Authorized Signature)
(Official Capacity - please print)
(Please print name of individual whose
signature appears above)

THIS IS NOT A PUBLIC DOCUMENT

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Sphere 3D Corp. Capital/Financing Update 2014

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Sphere 3D Corp. — Capital/Financing Update 2014

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