Sphere 3D Terminated Short Term Loan Facility With FBC Holdings

vSphere 3D Corp., parent company of Overland Storage and Tandberg Data, has terminated its short term loan facility with FBC Holdings S.a.r.l., by repaying $5 million and by increasing the existing convertible debenture with FBC by $5 million at substantially the same terms, which currently matures in 2018.

FBC is an affiliate of Cyrus Capital Partners, L.P., the investment manager for certain funds, which beneficially owns, directly or indirectly, securities of the company carrying more than 10% of the voting rights attached to the outstanding voting securities of the company.

As a result, the additional advance under the existing convertible debenture with FBC constitutes a ‘related party transaction’ within the meaning of Canadian Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (MI 61-101).

A resolution of the board of directors was passed to approve the transactions described herein.

The director affiliated with Cyrus did not vote on the resolution in respect of the transactions described herein insofar as they involve FBC and such director did not participate in the discussions relating thereto.

The company intends to file a material change report in connection with the transactions described herein.

However, such material change report will not be filed at least 21 days before the completion of the transactions described herein in order to allow the company to secure the financing opportunities described herein. The company is relying on the exemptions from the ‘formal valuation’ and ‘minority approval’ requirements under MI 61-101 set forth in sections 5.5(a) and 5.7(1)(a) of MI 61-101, respectively, based on the fact that the subject matter of, or consideration for, the transactions contemplated herein insofar as they involve interested parties, as determined by the board of directors of the company and in accordance with MI 61-101, does not exceed 25% of the market capitalization of the company, as determined in accordance with MI 61-101.