Notice of 2020 Annual Meeting of Stockholders — Crossroads Systems, Inc.

Summary

The notice of the 2020 annual meeting of stockholders and proxy statement of Crossroads Systems, Inc., a Delaware corporation, for a meeting scheduled for December 10, 2020, signed by Order of the Board by Chief Executive Officer Eric Donnelly on November 12, 2020. Stockholders are asked to elect seven directors, approve a three-year extension of charter provisions designed to protect the tax benefits of net operating loss carryforwards, and ratify Baker Tilly Virchow Krause, LLP as auditor for the fiscal year ending October 31, 2020. It states 5,971,994 shares were outstanding on the November 10, 2020 record date and that members of Capital Plus Financial LLC own in excess of 49.5% of the shares. The nominees include Robert H. Alpert, Eric Donnelly, James Pérez Foster, Farzana Giga, Claire Gogel, Ray Kembel and C. Clark Webb.

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CROSSROADS SYSTEMS, INC.
8214 Westchester Dr., Suite 950
Dallas, Texas 75225

NOTICE OF 2020 ANNUAL MEETING OF STOCKHOLDERS
To Be Held On December 10, 2020

To the Stockholders of Crossroads Systems, Inc.:

The 2020 annual meeting of stockholders (the “Meeting”) of Crossroads Systems, Inc., a
Delaware corporation (the “Company”), will be held on Thursday, December 10, 2020, at 12:00 p.m.,
Central Time, at 8214 Westchester Dr., Suite 635, Dallas, Texas 75525, for the following purposes:

1. To elect seven directors to our Board of Directors (the “Board”), to serve until the 2021
annual meeting of stockholders and until their successors have been duly elected and
qualified;

2. To adopt and approve an amendment to the Company’s Seventh Amended and Restated
Certificate of Incorporation (the “Charter”) effecting a three-year extension to the provisions
of the Charter designed to protect the tax benefits of the Company’s net operating loss
carryforwards;

3. To ratify the selection of Baker Tilly Virchow Krause, LLP as the Company’s independent
registered public accounting firm for the fiscal year ending October 31, 2020; and

4. To transact such other business as may properly come before the Meeting or any adjournment
or postponement thereof.

The Board has fixed the close of business on November 10, 2020 as the record date for the
determination of stockholders entitled to notice of and to vote at the Meeting or any adjournment or
postponement thereof. Only stockholders of record of common stock of the Company at the close of
business on the record date are entitled to notice of and to vote at the Meeting.

Your vote is very important. All stockholders are cordially invited to attend the Meeting. We
urge you, whether or not you plan to attend the Meeting, to submit your proxy by completing, signing,
dating and mailing the enclosed proxy or voting instruction card in the postage-paid envelope provided.
If a stockholder who has submitted a proxy attends the Meeting in person, such stockholder may revoke
the proxy and vote in person on all matters submitted at the Meeting.

The notice and proxy statement are first being mailed to our stockholders on or about November
12, 2020. Please follow the voting instructions on the enclosed proxy card to vote.

By Order of the Board of Directors,

Eric Donnelly
Chief Executive Officer

November 12, 2020
CROSSROADS SYSTEMS, INC.
8214 Westchester Dr., Suite 950
Dallas, Texas 75225

PROXY STATEMENT

For 2020 Annual Meeting Of Stockholders
To Be Held On December 10, 2020

This proxy statement contains information related to the 2020 annual meeting of stockholders
(the “Meeting”) of Crossroads Systems, Inc. (the “Company”) to be held on Thursday, December 10,
2020, at 12:00 p.m. Central Time, at 8214 Westchester Dr., Suite 635, Dallas, Texas 75525. The notice
and proxy statement are first being mailed to our stockholders on or about November 12, 2020.

About the Meeting

Purpose of the Meeting

At the Meeting, holders of the Company’s common stock, $0.001 par value (“Common Stock”),
will hear an update on the Company’s operations, have a chance to meet some of its directors and
executives and will act on the following matters:

1. To elect seven directors to our Board of Directors (the “Board”), to serve until the 2021
annual meeting of stockholders and until their successors have been duly elected and
qualified;

3. To ratify the selection of Baker Tilly Virchow Krause, LLP as the Company’s independent
registered public accounting firm for the fiscal year ending October 31, 2020; and

4. To transact such other business as may properly come before the Meeting or any adjournment
or postponement thereof.

Who May Vote

Our outstanding voting securities consist of shares of Common Stock. Only holders of record of
shares of Common Stock at the close of business on November 10, 2020, the record date of the Meeting,
are entitled to notice of and to vote at the Meeting. On the record date of the Meeting, there were
5,971,994 shares of Common Stock outstanding and entitled to vote at the Meeting. The holders of a
majority of the shares of Common Stock issued and outstanding and entitled to vote at the Meeting is
necessary to constitute a quorum. Each share of Common Stock is entitled to one vote. The members of
Capital Plus Financial LLC (“CPF”) (who collectively in the aggregate own in excess of 49.5% of the
outstanding shares of Common Stock), and the members of the Board have indicated to the Company that
they intend to vote all of their shares of Common Stock in favor of all proposals contained in this proxy
statement.

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Attending in Person

Only holders of Common Stock, their proxy holders and our invited guests may attend the
Meeting. If you wish to attend the Meeting in person but you hold your shares through someone else,
such as a stockbroker, you must bring proof of your ownership and identification with a photo at the
Meeting. For example, you may bring an account statement showing that you beneficially owned
Company shares as of November 10, 2020 as acceptable proof of ownership.

Instructions for Holders of Common Stock

How to Vote

You may vote in person at the Meeting or by proxy. We recommend that you vote by proxy even
if you plan to attend the Meeting. You can always change your vote at the Meeting. Proxy cards must be
received by us before voting begins at the Meeting.

How Proxies Work

Our Board is asking for your proxy. Giving us your proxy means you authorize us to vote your
shares at the Meeting in the manner you direct. You may vote for all, some or none of our director
nominees. You also may vote for or against any other proposal or abstain from voting.

Proxies submitted by mail will be voted by the individuals named on the proxy card in the
manner you indicate. If you give us your proxy but do not specify how you want your shares voted, they
will be voted in accordance with the Board’s recommendations set forth in this proxy statement.

You may receive more than one proxy or voting card depending on how you hold your shares. If
you hold shares through someone else, such as a stockbroker, you may get materials from them asking
how you want to vote. The latest signed proxy we receive from you will determine how we will vote
your shares.

Revoking a Proxy

There are three ways to revoke your proxy. First, you may submit a new signed proxy with a
later date up until the existing proxy is voted. Second, you may vote in person at the Meeting (although
attendance at the Meeting will not, in and of itself, constitute a revocation of the proxy). Finally, you may
write to the Company’s corporate secretary at 8214 Westchester Dr., Suite 950 Dallas, Texas 75225 that
you are revoking your proxy.

Quorum

In order to act on the proposals described herein, we must have a quorum of stockholders at the
Meeting. The holders of a majority of the shares of Common Stock issued and outstanding and entitled to
vote at the Meeting is necessary to constitute a quorum. Shares that the Company holds as treasury shares
are not voted and do not count for this purpose.

Votes Needed

With respect to the election of directors, the director nominees receiving a plurality of the votes
cast at the Meeting will be elected to fill the seats of our Board. This means that the nominees who
receive the most votes will be elected. For purposes of the election of directors, the withholding of

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authority by a stockholder as to the election of directors will have no effect on the results of the election.
To approve Proposal No. 2, to adopt and approve an amendment to the Charter effecting a three-year
extension to the provisions of the Charter designed to protect the tax benefits of our net operating losses,
the affirmative vote of the holders of a majority of the shares of Common Stock issued and outstanding
on the Record Date will be required. Both broker non-votes and abstentions will act as a vote against
Proposal No. 2. To approve Proposal No. 3, to ratify the selection of Baker Tilly Virchow Krause, LLP as
the Company’s auditors for the fiscal year ending October 31, 2020, the affirmative vote of a majority of
the votes cast will be required. Abstentions will have no effect on Proposal No. 3.

Proxies that abstain on one or more proposals and broker non-votes will be deemed present for
quorum purposes for all proposals to be voted on at the Meeting. Broker non-votes occur where a broker
holding shares in “street name” is entitled to vote the shares on some matters but not others. If your
shares are in street name (or held by your broker) and you do not give your broker voting instructions on
those matters for which the broker has no discretion, the missing votes are broker non-votes. Brokers are
entitled to vote on Proposal No. 3 in the event they do not receive voting instructions from their clients.
Client directed abstentions are not broker non-votes. Stockholders who sign, date and return a proxy but
do not indicate how their shares are to be voted are giving management full authority to vote their shares
as they deem best for the Company. For these reasons, it is important that all shares are represented at the
Meeting, either by you personally attending the Meeting or by giving a proxy to vote your shares.

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PROPOSAL 1
ELECTION OF DIRECTORS

The Board is presently composed of seven members. The Board has nominated the seven persons
listed below for election as directors. If elected at the Meeting, each director would serve until the 2021
annual meeting of stockholders and until his or her successor is elected and has qualified, or until such
director’s earlier death, resignation or removal.

A director is elected by a plurality of the votes present in person or represented by proxy and
entitled to vote on the election of directors. Shares represented by executed proxies will be voted, if the
authority to do so is not withheld, for the election of the nominees named below. In the event that any
nominee should be unavailable for election as a result of an unexpected occurrence, shares represented by
executed proxies will be voted for the election of such substitute nominee as the Board may propose. The
persons nominated for election have agreed to serve if elected, and the Company has no reason to believe
that any of the nominees will be unable to serve. There are no family relationships among any of the
directors, director nominees and executive officers.

The following table sets forth, as of November 10, 2020, the name of the Board’s nominees for
election as a director. Also set forth below is certain other information with respect to each such person’s
age, the periods during which he or she has served as a director and positions currently held with the
Company.

Director
Director Nominee Age Since Positions and Offices Held
Robert H. Alpert 55 2017 Chairman of the Board
Eric Donnelly 46 2017 Chief Executive Officer and Director
James Pérez Foster 50 2018 Director
Farzana Giga 46 2017 Secretary and Director
Claire Gogel 47 2017 Director
Ray Kembel 52 2018 Director
C. Clark Webb 39 2017 Director

Set forth below is biographical information for each director nominee.

Robert H. Alpert has served as Chairman of the Board since October 2017. He is the Chairman
and Co-CEO of P10 Holdings, Inc. He is also the co-founder and principal of 210 Capital, LLC. Mr.
Alpert is a director of Elah Holdings, Inc., Collaborative Imaging, LLC and Chairman of the Board of
Redpoint Insurance Group, LLC. He is also the co-founder of Homebuilder Capital Advisors, LLC and
the co-founder and managing member of Merfax Financial Group, LP. Mr. Alpert previously served as
the Chief Executive Officer and Chairman of the Board of GlobalSCAPE, Inc. Prior to
founding 210 Capital, Mr. Alpert was the founder and portfolio manager of Atlas Capital Management,
L.P.

Eric Donnelly has served as a director and as Chief Executive Officer since December 2017. Mr.
Donnelly has spent his 20-year career focused on supporting small businesses and developing low to
moderate income communities with an emphasis on Hispanic homeownership. He has served as Capital
Plus Financial LLC’s Chief Executive Officer since 2014 after having been hired by the company’s
founder in 2012 to scale the 25-year social enterprise. Mr. Donnelly has grown the company into one of
the largest Community Development Financial Institutions in the country and under his leadership has
achieved its B Corp certification further reinforcing the company’s commitment to community impact as

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well as shareholder value growth. In 2005 after many years in commercial banking, Mr. Donnelly
founded a national small balance commercial real estate finance company focused on delivering long
term, fixed rate options to small business owners. He is an active Hispanic entrepreneur and leader whose
passion it is to improve underserved and underbanked market segments. Mr. Donnelly is a graduate of
Southern Methodist University with a Bachelor of Arts in Economics. Mr. Donnelly is a on the board of
InBankshares, a community bank based in Raton, NM serving the New Mexico and Colorado Front
Range markets. He is a participant in the BBVA Momentum program for Social Entrepreneurs, a 2017
graduate of the Stanford Latino Entrepreneur Initiative and a continuing mentor to Latino entrepreneurs
participating in the Stanford program.

James Pérez Foster has served as a director since February 2018 and is an Audit Committee
member. Mr. Pérez Foster is a seasoned board member with national banking and Community
Development Financial Institution (CDFI) board experience. He is a technology executive and
management consultant with more than 25 years of strategic growth, impact investment advisory and
community engagement experience. A published expert on U.S. underserved market segments for global
financial services and banking institutions, Mr. Pérez Foster is the founder of Bainbridge Advisors, LLC,
a consulting and research firm that serves financial institutions and federal agencies. Mr. Pérez Foster also
founded Solera National Bancorp, a federally chartered bank holding company that is credited as one of
the first Hispanic-markets focused commercial banks in the country. Mr. Pérez Foster has a BA in
International Relations from Syracuse University’s Maxwell School of Citizenship and Public Affairs.

Farzana Giga has served as a director since December 2017, as Secretary since June 2018 and as
Capital Plus Financial LLC’s Chief Financial Officer since 2014. Ms. Giga also a member of the Audit
Committee. Ms. Giga’s background includes extensive experience in private equity, financial reporting
and analysis, investor reporting and treasury for both private and public companies in Canada and the
United States. Prior to Capital Plus, Ms. Giga served as CFO for a private equity firm focused on
residential seller financing including acquisitions, mortgage origination and mortgage servicing for a
portfolio exceeding $100M. From 2007 to 2009, she worked as an Investment Manager at Quadrant
Capital Partners where she was responsible for loan acquisitions and financial analysis of residential and
commercial real estate. Prior to Quadrant, Ms. Giga served as an Assistant Vice President at INYX
Canada where she was responsible for all strategic and financial planning, budgeting/forecasting, cash
flow analysis, mergers and acquisitions analysis including quarterly and annual SEC filings. Prior to
INYX, Ms. Giga served as Director, Treasury at RR Donnelly responsible for managing a debt portfolio
of $2B. Ms. Giga is a Certified Public Accountant, Certified Management Accountant in Ontario, Canada
and received her Bachelor of Arts, Economics (Management & Accounting) from the University of
Toronto.

Claire Gogel has served as a director since October 2017. Ms. Gogel was an Independent
Director and member of the Finance and Restructuring Committee at SunEdison, Inc., and served in that
position from 2016 when she was appointed as an independent director by Greenlight Capital. From 2009
to 2014, Ms. Gogel served as a partner and analyst at Greenlight Capital, a hedge fund in New York.
From 2001 to 2009, Ms. Gogel was the founder and portfolio manager of Perennial Advisors, a long-short
equity hedge fund. Ms. Gogel’s professional experience also includes positions as a portfolio manager at
Discovery Partners and as a research associate at Cardinal Investment Company. Ms. Gogel is a Board
member and member of the Grant Committee for Capital for Kids and has served in that position since
2005. Ms. Gogel earned a Bachelor of Arts degree with High Honors from The University of Texas at
Austin.

Ray Kembel has served as a director since February 2018 and is the Chairman of the Audit
Committee. Mr. Kembel is a tenured finance executive with a broad knowledge of real estate and credit
finance. He is currently an Executive Vice President with Oakwood Bank in Texas. Prior to joining

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Oakwood Bank, Mr. Kembel helped develop the Dallas commercial banking platform for Green Bancorp,
Inc. (NASDAQ: GNBC), recently acquired by Veritex Bank (NASDAQ: VBTX). Ray previously spent
10 years with Staubach Capital Partners, a private equity group under The Staubach Company umbrella,
acquired by JLL (NYSE: JLL). He began his career with Bank of America (NYSE: BAC). Mr. Kembel
holds a BBA degree from The University of Texas at San Antonio and an MBA from The University of
Dallas.

C. Clark Webb has served as a director since October 2017 and serves as a member of the Audit
Committee. Mr. Webb is the Co-CEO and a Director of P10 Holdings, Inc. He is also the co-founder and
principal of 210 Capital, LLC. Additionally, Mr. Webb serves as the Chairman of the Board of Elah
Holdings, Inc. and Chairman of the Board of Collaborative Imaging LLC. Previously, Mr. Webb was
Founder and Managing Member of P10 Capital Management, Co-Portfolio Manager of the Lafayette
Street Fund and a Partner at Select Equity Group, L.P. Mr. Webb holds a B.A. from Princeton University.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF THE NAMED
NOMINEES.

Stockholder Communications with the Directors

Stockholders wishing to communicate with our Board as a whole or with certain directors,
including the Chairman of the Board, individually, may do so by writing the Corporate Secretary at our
headquarters at 8214 Westchester Dr., Suite 950 Dallas, Texas 75225. Each stockholder communication
should include an indication of the submitting stockholder’s status as our stockholder and eligibility to
submit such communication. Each such communication will be received for handling by the Corporate
Secretary, who will maintain originals of each communication received and provide copies to (i) the
Chairman and (ii) any other appropriate director(s) based on the expressed desire of the communicating
stockholder and content of the subject communication. The Corporate Secretary also will coordinate with
the Chairman to facilitate a response, if it is believed that a response is appropriate or necessary, to each
communication received. The Board reserves the right to revise this policy in the event that this process is
abused, becomes unworkable or otherwise does not efficiently serve the purpose of the policy.

Security Ownership of Certain Beneficial Owners and Management

The following table sets forth, as of November 10, 2020 information with respect to the
outstanding shares of Common Stock, par value $0.001 per share, beneficially owned by each person
(including any “group” as that term is used in Section 13(d)(3) of the Exchange Act) known to the
Company to be the beneficial owners of more than 5% of any class of the Company’s voting securities,
each director of the Company, the principal executive officer and principal financial officer of the
Company and all persons then serving as directors and officers of the Company as a group. Unless
otherwise indicated, the address of each individual beneficial owner listed in the following table is c/o
8214 Westchester Dr., Suite 950 Dallas, Texas 75225. Except as otherwise indicated, all shares are
owned directly.

Amount and Nature
Name of Beneficial of Beneficial Percent of
Owner Ownership Class (1)
5% Owners
210/CRDS Investment LLC (2) 1,492,285 24.9%
Westchester Standard LLC 557,255 9.3%
Mark Crockett 466,233 7.8%

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Charles A. Vose III 299,722 5.0%

Directors and Officers
Robert Alpert (2) 1,492,285 24.9%
C. Clark Webb (2) 1,492,285 24.9%
Claire Gogel 193,438 3.2%
James Pérez Foster (3) 601 *
Ray Kembel 401 *
Eric Donnelly (4) 532,838 8.9%
Farzana Giga (5) 432,931 7.2%

All directors and executive officers as 2,652,494 44.4%
a group (seven persons)
________________________
*Less than 1%.
(1) For purposes of this table, a person is deemed to have “beneficial ownership” of any shares as of
a given date (i) which such person has the right to acquire within 60 days after such date, (ii) over
which such person has voting power or (iii) over which such person has investment power,
including disposition power. For purposes of computing the percentage of outstanding shares held
by each person named above on a given date, any security which such person has the right to
acquire within 60 days after such date is deemed to be outstanding, but is not deemed to be
outstanding for the purpose of computing the percentage ownership of any other person.

(2) Consists of 1,492,285 shares directly owned by 210/CRDS Investments LLC, a Texas limited
liability company (“210”). Robert H. Alpert and C. Clark Webb are Managing Members of 210.
By virtue of these relationships, Messrs. Alpert and Webb may be deemed to beneficially own the
shares owned directly by 210. The address for each of 210, Mr. Alpert and Mr. Webb is 8214
Westchester Drive, Suite 950, Dallas, Texas 75225.

(3) Includes 200 shares held by Mr. Pérez Foster’s spouse.

(4) Consists of 532,838 shares held directly by EDUCM Inc., of which Mr. Donnelly is the sole
stockholder. By virtue of this relationship, Mr. Donnelly may be deemed to beneficially own the
shares owned by EDUCM Inc.

(5) Consists of 432,931 shares held directly by Giga Investments LLC, of which Ms. Giga and her
spouse are the sole members. By virtue of this relationship, Ms. Giga may be deemed to
beneficially own the shares owned by Giga Investments LLC.

Executive and Director Compensation

The services of Eric Donnelly, our Chief Executive Officer, and Farzana Giga, our Secretary, are
provided to the Company pursuant to their employment agreements with CPF, the Company’s wholly
owned subsidiary. See “Related Party Transactions.”

The Company’s non-employee directors are compensated quarterly in arrears for their service,
such compensation consisting of cash or shares of restricted stock, at the election of each director. Each
director of the Company is entitled to receive board fees equal to $15,000 for fiscal 2020. In addition, the
Chairman of the Board receives an additional $900 annual fee.

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Related Party Transactions

Since November 1, 2018, there has not been, nor is there currently proposed, any transaction or
series of similar transactions to which we were or are a party in which the amount involved exceeded or
exceeds the lesser of $120,000 or 1% of our total assets and in which any of our directors, executive
officers, holders of more than 5% of any class of our voting securities or any member of the immediate
family of any of the foregoing persons, had or will have a direct or indirect material interest, other than
compensation arrangements with directors and executive officers and the transactions described or
referred to below.

In December 2017, the Company closed on the acquisition of CPF. As part of the transaction,
CPF stockholders received $30.8 million in cash and an aggregate of 2,955,028 newly issued shares of the
Company’s stock, representing 49.5% of the Company’s outstanding shares after giving effect to the
closing. The cash portion of the purchase price was funded with $24.2 million of new Company debt plus
$6.6 million of CPF cash on hand. In connection with the transaction, Mr. Donnelly and Ms. Giga were
appointed to the Company’s Board and Mr. Donnelly was appointed as Chief Executive Officer.

The Company’s executive officers, Eric Donnelly and Farzana Giga, are employees of CPF and
have existing employment agreements with CPF with annual salaries of $350,000 and $300,000,
respectively.

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PROPOSAL NO. 2
AMENDMENT OF NOL PROTECTIVE AMENDMENT TO THE COMPANY’S SEVENTH
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION

Our Company has significant deferred tax assets, which we may be able to use to offset future
taxable income. At October 31, 2020, our Company had U.S. federal income tax net operating losses
(“NOLs”) of approximately $104 million.

Our ability to utilize our NOLs to offset future taxable income may be significantly limited if we
experience an “ownership change” as defined in Section 382 of the Internal Revenue Code of 1986, as
amended (the “Code”). In general, an ownership change will occur when the percentage of our ownership
(by value) by one or more “5-percent shareholders” (as defined in the Code) has increased by more than
50% over the lowest percentage owned by such stockholders at any time during the prior three years
(calculated on a rolling basis). An entity that experiences an ownership change generally will be subject
to an annual limitation on its pre-ownership change tax losses and credit carryforwards equal to the equity
value of the entity immediately before the ownership change, multiplied by the long-term, tax-exempt rate
posted monthly by the Internal Revenue Service (“IRS”) (subject to certain adjustments). The annual
limitation would be increased each year to the extent that there is an unused limitation in a prior year. The
limitation on our ability to utilize our NOLs arising from an ownership change under Section 382 would
depend on the value of our equity at the time of any ownership change.

For the purpose of determining whether there has been an ownership change, the change in
ownership as a result of purchases by 5-percent shareholders will be aggregated with certain changes in
ownership that occurred over the three-year period ending on the date of such purchases. If our Company
were to experience an ownership change, it is possible that a significant portion of our NOLs would
expire before we would be able to use them to offset future taxable income.

In 2015, our stockholders approved an amendment to our Sixth Amended and Restated Certificate
of Incorporation to generally prohibit transfers of our Common Stock that could result in an ownership
change (the “2015 NOL Protective Amendment”). Pursuant to the Company’s plan of reorganization
which, pursuant to chapter 11 of title 11 of the United States Bankruptcy Code, was confirmed by an
order, entered September 18, 2017, of the United States Bankruptcy Court for the Western District of
Texas (the “Confirmation Order”), the Confirmation Order and Section 303 of the General Corporate Law
of the State of Delaware, in 2017 the Company amended the expiration date of the 2015 NOL Protective
Amendment to October 3, 2021 (as amended, the “NOL Protective Amendment”). The NOL Protective
Amendment is scheduled to expire on October 3, 2021. On November 5, 2020, the Board of Directors,
subject to approval by stockholders, approved a Certificate of Amendment effecting an extension of the
expiration date of the NOL Protective Amendment by three additional years (until October 3, 2024)(the
“Extended Protective Amendment”) and is hereby soliciting stockholder approval for the Extended
Protective Amendment.

The Extended Protective Amendment leaves the NOL Protective Amendment unchanged in all
respects, other than to extend the expiration date from October 3, 2021 to October 3, 2024. Our Board of
Directors has adopted resolutions approving and declaring the advisability of amending our Restated
Certificate of Incorporation as described below, and the complete text of the Extended Protective
Amendment (marked to show the revisions to the Original Protective Amendment) is attached as Annex
A to this Proxy Statement. However, in order for the Extended Protective Amendment to be implemented,
it first must be approved by our stockholders at the Annual Meeting.

The Extended Protective Amendment, if approved by our stockholders, would become effective
upon the filing of a Certificate of Amendment to our Seventh Amended and Restated Certificate of

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Incorporation with the Secretary of State of the State of Delaware, which we would expect to do as soon
as practicable after the Extended Protective Amendment is approved by our stockholders. Even if
approved by the stockholders, the Board of Directors retains the authority to abandon the Extended
Protective Amendment for any reason at any time prior to the filing and effectiveness of the Extended
Protective Amendment with the Secretary of State of the State of Delaware.

Description of the Extended Protective Amendment

The following description of the Extended Protective Amendment is qualified in its entirety by
reference to the complete text of the Extended Protective Amendment (marked to show the revisions to
the NOL Protective Amendment), which is attached as Annex A to this Proxy Statement. The Extended
Protective Amendment should be read in connection with the NOL Protective Amendment, a copy of
which is included in our Proxy Statement filed with the SEC on March 20, 2015. Please read the
Extended Protective Amendment and the NOL Protective Amendment both in their entirety, as the
discussion below is only a summary.

Prohibited Transfers. The Extended Protective Amendment generally will restrict any direct or
indirect transfer (such as transfers of our Common Stock that result from the transfer of interests in other
entities that own our Common Stock) if the effect would be to:

 increase the direct or indirect ownership of our Common Stock by any Person (as defined
below) from less than 4.99% to 4.99% or more of our Common Stock; or

 increase the percentage of our Common Stock owned directly or indirectly by a Person
owning or deemed to own 4.99% or more of our Common Stock.

“Person” means any individual, partnership, joint venture, limited liability company, firm,
corporation, unincorporated association or organization, trust or other entity or any group of such
“Persons” having a formal or informal understanding among themselves to make a “coordinated
acquisition” of shares within the meaning of Treasury Regulation § 1.382-3(a)(1) or who are otherwise
treated as an “entity” within the meaning of Treasury Regulation § 1.382-3(a)(1), and includes any
successor (by merger or otherwise) of any such entity or group.

Restricted transfers include sales to Persons whose resulting percentage ownership (direct or
indirect) of our Common Stock would equal or exceed the 4.99% thresholds discussed above, or to
Persons whose direct or indirect ownership of our Common Stock would by attribution cause another
Person to equal or exceed such threshold. Complicated stock ownership rules prescribed by the Code (and
regulations promulgated thereunder) will apply in determining whether a Person is a 4.99% stockholder
under the NOL Protective Amendment. A transfer from one member of a “public group” (as that term is
defined under Section 382) to another member of the same public group does not increase the percentage
of our Common Stock owned directly or indirectly by the public group and, therefore, such transfers are
not restricted. For purposes of determining the existence and identity of, and the amount of our Common
Stock owned by, any stockholder, we will be entitled to rely on the existence or absence of certain public
securities filings as of any date, and our actual knowledge of the ownership of our Common Stock. The
NOL Protective Amendment includes the right to require a proposed transferee, as a condition to
registration of a transfer of our Common Stock, to provide all information reasonably requested regarding
such person’s direct and indirect ownership of our Common Stock.

These transfer restrictions may result in the delay or refusal of certain requested transfers of our
Common Stock, or prohibit ownership (thus requiring dispositions) of our Common Stock due to a
change in the relationship between two or more persons or entities or to a transfer of an interest in an

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entity other than us that, directly or indirectly, owns our Common Stock. The transfer restrictions will
also apply to proscribe the creation or transfer of certain “options” (which are broadly defined by Section
382) with respect to our Common Stock to the extent that, in certain circumstances, the creation, transfer
or exercise of the option would result in a proscribed level of ownership.

Consequences of Prohibited Transfers. Upon adoption of the Extended Protective Amendment,
any direct or indirect transfer attempted in violation of the NOL Protective Amendment would be void as
of the date of the prohibited transfer as to the purported transferee (or, in the case of an indirect transfer,
the ownership of the direct owner of our Common Stock would terminate simultaneously with the
transfer), and the purported transferee (or in the case of any indirect transfer, the direct owner) would not
be recognized as the owner of the shares owned in violation of the NOL Protective Amendment for any
purpose, including for purposes of voting and receiving dividends or other distributions in respect of such
shares, or in the case of options, receiving shares in respect of their exercise. In this Proxy Statement, our
Common Stock purportedly acquired in violation of the NOL Protective Amendment is referred to as
“excess stock.”

In addition to a prohibited transfer being void as of the date it is attempted, upon demand, the
purported transferee must transfer the excess stock to our agent along with any dividends or other
distributions paid with respect to such excess stock. Our agent is required to sell such excess stock in an
arm’s-length transaction (or series of transactions) that would not constitute a violation under the NOL
Protective Amendment. The net proceeds of the sale, together with any other distributions with respect to
such excess stock received by our agent, after deduction of all costs incurred by the agent, will be
transferred first to the purported transferee in an amount, if any, up to the cost (or in the case of gift,
inheritance or similar transfer, the fair market value of the excess stock on the date of the prohibited
transfer) incurred by the purported transferee to acquire such excess stock, and the balance of the
proceeds, if any, will be transferred to a charitable beneficiary. If the excess stock is sold by the purported
transferee, such person will be treated as having sold the excess stock on behalf of the agent, and will be
required to remit all proceeds to our agent (except to the extent we grant written permission to the
purported transferee to retain an amount not to exceed the amount such person otherwise would have been
entitled to retain had our agent sold such shares).

To the extent permitted by law, any stockholder who knowingly violates the NOL Protective
Amendment will be liable for any and all damages we suffer as a result of such violation, including
damages resulting from any limitation in our ability to use our NOLs and any professional fees incurred
in connection with addressing such violation.

With respect to any transfer of Common Stock that does not involve a transfer of our securities
within the meaning of Delaware law but that would cause a person to violate the NOL Protective
Amendment, the following procedure will apply in lieu of those described above: in such case, such
person whose ownership of our securities is attributed to such proscribed person will be deemed to have
disposed of (and will be required to dispose of) sufficient securities, simultaneously with the transfer, to
cause such proscribed person not to be in violation of the NOL Protective Amendment, and such
securities will be treated as excess stock to be disposed of through the agent under the provisions
summarized above, with the maximum amount payable to such stockholder that was the direct holder of
such excess stock from the proceeds of sale by the agent being the fair market value of such excess stock
at the time of the prohibited transfer.

Public Groups; Modification and Waiver of Transfer Restrictions. In order to facilitate sales by
our stockholders into the market, the NOL Protective Amendment permits otherwise prohibited transfers
of our Common Stock where the transferee is a public group.

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In addition, our Board will have the discretion to approve a transfer of our Common Stock that
would otherwise violate the transfer restrictions if it determines that the transfer is in our and our
stockholders’ best interests. If our Board decides to permit such a transfer, that transfer or later transfers
may result in an ownership change that could limit our use of our NOLs. In deciding whether to grant a
waiver, our Board may seek the advice of counsel and tax experts with respect to the preservation of our
federal tax attributes pursuant to Section 382. In addition, our Board may request relevant information
from the acquirer and/or selling party in order to determine compliance with the NOL Protective
Amendment or the status of our federal income tax benefits, including an opinion of counsel selected by
our Board (the cost of which will be borne by the transferor and/or the transferee) that the transfer will not
result in a limitation on the use of our NOLs under Section 382. If our Board decides to grant a waiver, it
may impose conditions on such waiver on the acquirer or selling party.

In the event of a change in law, our Board will be authorized to modify the applicable allowable
percentage ownership interest (currently less than 4.99%) or modify any of the definitions, terms and
conditions of the transfer restrictions or to eliminate the transfer restrictions, provided that our Board
determines, by adopting a written resolution, that such action is reasonably necessary or advisable to
preserve our NOLs or that the continuation of these restrictions is no longer reasonably necessary for such
purpose, as applicable. Our stockholders will be notified of any such determination through a filing with
the SEC or such other method of notice as the Secretary of the Company shall deem appropriate.

Our Board may establish, modify, amend or rescind bylaws, regulations and procedures for
purposes of determining whether any transfer of Common Stock would jeopardize our ability to use our
NOLs.

Implementation and Expiration of the NOL Protective Amendment

If our stockholders approve the Extended Protective Amendment, we intend to file the Extended
Protective Amendment promptly with the Secretary of State of the State of Delaware, whereupon the
Extended Protective Amendment will become effective. We intend to enforce the restrictions in the
Extended Protective Amendment immediately thereafter to preserve the future use of our NOLs. We also
intend to include a legend reflecting the transfer restrictions included in the Extended Protective
Amendment on certificates representing newly issued or transferred shares, to disclose such restrictions to
persons holding our Common Stock in uncertificated form and to disclose such restrictions to the public
generally.

Even if our stockholders approve the Extended Protective Amendment, the Board retains the
authority to abandon the Extended Protective Amendment for any reason at any time prior to the filing
and effectiveness of the Extended Protective Amendment with the Secretary of State of the State of
Delaware.

The Extended Protective Amendment would expire on the earliest of (i) the close of business on
October 3, 2024, (ii) our Board’s determination that the Protective Amendment is no longer necessary for
the preservation of our NOLs because of the repeal of Section 382 or any successor statute, (iii) the
beginning of a taxable year to which our Board determines that none of our NOLs may be carried forward
and (iv) such date as our Board otherwise determines that the NOL Protective Amendment is no longer
necessary for the preservation of our NOLs. Our Board may also accelerate the expiration date of the
NOL Protective Amendment in the event of a change in the law if our Board has determined that the
continuation of the restrictions contained in the NOL Protective Amendment is no longer reasonably
necessary for the preservation of our NOLs or such action is otherwise reasonably necessary or advisable.

Effectiveness and Enforceability

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Although the NOL Protective Amendment is intended to reduce the likelihood of an ownership
change, we cannot eliminate the possibility that an ownership change will occur even if the Extended
Protective Amendment is adopted given that:

 The Board can permit a transfer to an acquirer that results or contributes to an ownership
change if it determines that such transfer is in our and our stockholders’ best interests.

 A court could find that part or all of the NOL Protective Amendment is not enforceable,
either in general or as applied to a particular stockholder or fact situation. Delaware law
provides that transfer restrictions with respect to shares issued prior to the adoption of the
restriction are effective against (i) holders of those securities that are parties to the
applicable agreement or voted in favor of the restriction and (ii) purported successors or
transferees of such holders if (A) the transfer restriction is noted conspicuously on the
certificate(s) representing such shares or (B) the successor or transferee had actual
knowledge of the transfer restrictions (even absent such conspicuous notation). We intend
to cause shares of our Common Stock issued after the effectiveness of the Extended
Protective Amendment to be issued with the relevant transfer restriction conspicuously
noted on the certificate(s) representing such shares, and therefore under Delaware law
such newly issued shares will be subject to the transfer restriction. We also intend to
disclose such restrictions to persons holding our Common Stock in uncertificated form.
For the purpose of determining whether a stockholder is subject to the NOL Protective
Amendment, we intend to take the position that all shares issued prior to the effectiveness
of the Extended Protective Amendment that are proposed to be transferred were voted in
favor of the Extended Protective Amendment, unless the contrary is established. We may
also assert that stockholders have waived the right to challenge or otherwise cannot
challenge the enforceability of the Extended Protective Amendment, unless a stockholder
establishes that it did not vote in favor of the Extended Protective Amendment.
Nonetheless, despite these actions, a court still could find that the Extended Protective
Amendment is unenforceable, either in general or as applied to a particular stockholder or
fact situation.

 Despite the adoption of the Extended Protective Amendment, there is still a risk that
certain changes in relationships among stockholders or other events could cause an
ownership change under Section 382. Accordingly, we cannot assure you that an
ownership change will not occur even if the Extended Protective Amendment is made
effective.

As a result of these and other factors, the Extended Protective Amendment is intended to reduce,
but does not eliminate, the risk that we will undergo an ownership change that would limit our ability to
utilize our NOLs.

Section 382 Ownership Change Determinations

The rules of Section 382 are very complex and are beyond the scope of this summary discussion.
Some of the factors that must be considered in determining whether a Section 382 ownership change has
occurred include the following:

 Each stockholder who owns less than 5% of our Common Stock is generally (but not
always) aggregated with other such stockholders and treated as a single “5-percent
stockholder” for purposes of Section 382. Transactions in the public markets among such
stockholders are generally (but not always) excluded from the Section 382 calculation.

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 There are several rules regarding the aggregation and segregation of stockholders who
otherwise do not qualify as Section 382 “5-percent stockholders.” Ownership of stock is
generally attributed to its ultimate beneficial owner without regard to ownership by
nominees, trusts, corporations, partnerships or other entities.

 Acquisitions by a person that cause the person to become a Section 382 “5-percent
stockholder” generally result in a 5% (or more) change in ownership, regardless of the
size of the final purchase(s) that caused the threshold to be exceeded.

 Certain constructive ownership rules, which generally attribute ownership of stock owned
by estates, trusts, corporations, partnerships or other entities to the ultimate indirect
individual owner thereof, or to related individuals, are applied in determining the level of
stock ownership of a particular stockholder. Special rules can result in the treatment of
options (including warrants) or other similar interests as having been exercised if such
treatment would result in an ownership change.

 Our redemption or buyback of our Common Stock will increase the ownership of any
Section 382 “5-percent stockholders” (including groups of stockholders who are not
individually 5-percent stockholders) and can contribute to an ownership change. In
addition, it is possible that a redemption or buyback of shares could cause a holder of less
than 5% to become a Section 382 “5-percent stockholder,” resulting in a 5% (or more)
change in ownership.

Voting Requirements

Stockholder approval of the Extended Protective Amendment will require the affirmative vote of
the holders of a majority of the outstanding shares of Common Stock entitled to vote at the Meeting.
Broker non-votes and abstentions, if any, will have the effect of votes “AGAINST” this proposal.

If the Extended Protective Amendment is not approved, the NOL Protective Amendment will
expire on October 1, 2021, in accordance with its original terms.

OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE
EXTENDED PROTECTIVE AMENDMENT.

PROPOSAL NO. 3
RATIFICATION OF AUDITORS

The Board has appointed Baker Tilly Virchow Krause, LLP as our independent registered public
accounting firm to audit our financial statements and management’s assessment of internal controls over
financial reporting for the fiscal year ending October 31, 2020. Our Board of Directors is seeking
stockholder ratification of the appointment of Baker Tilly Virchow Krause, LLP as our independent
registered public accounting firm for our fiscal year 2020. Baker Tilly Virchow Krause, LLP served as
our independent registered public accounting firm for the fiscal year ended October 31, 2019.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF THE
RATIFICATION OF THE APPOINTMENT OF BAKER TILLY VIRCHOW KRAUSE, LLP.

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STOCKHOLDER PROPOSALS AND OTHER MATTERS

Solicitation of Proxies

The cost of the solicitation of proxies will be paid by us. In addition to solicitation by mail, our
directors, officers and employees may solicit proxies from stockholders by telephone, facsimile,
electronic mail or in person. We will also make arrangements with brokerage houses and other
custodians, nominees and fiduciaries to send the proxy materials to beneficial owners. Upon request, we
will reimburse those brokerage houses and custodians for their reasonable expenses in so doing.

Other Matters

So far as now known, there is no business other than that described above to be presented for
action by the stockholders at the Meeting, but it is intended that the proxies will be voted upon any other
matters and proposals that may legally come before the Meeting or any adjournment thereof, in
accordance with the discretion of the persons named therein.

CROSSROADS SYSTEMS, INC.

Eric Donnelly
Chief Executive Officer

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ANNEX A

FORM OF CERTIFICATE OF AMENDMENT TO THE SEVENTH AMENDED AND
RESTATED CERTIFICATE OF INCORPORATION TO EFFECT THE EXTENDED
PROTECTIVE AMENDMENT

CERTIFICATE OF AMENDMENT

OF THE

SEVENTH AMENDED AND RESTATED CERTIFICATE OF INCORPORATION

CROSSROADS SYSTEMS, INC.

Crossroads Systems, Inc., a corporation organized and existing under and by virtue of the General
Corporation Law of the State of Delaware (the “Corporation”),

DOES HEREBY CERTIFY:

FIRST: That resolutions were duly adopted by the Board of Directors of the Corporation setting
forth this proposed Amendment to the Seventh Amended and Restated Certificate of Incorporation of the
Corporation and declaring said Amendment to be advisable and recommended for approval by the
stockholders of the Corporation.

SECOND: This Amendment to the Seventh Amended and Restated Certificate of Incorporation
amends and restates Article XV to the Seventh Amended and Restated Certificate of Incorporation to
read in its entirety as follows:

ARTICLE XV

15.1 Definitions. As used in this Article XV, the following capitalized terms have the following
meanings when used herein with initial capital letters (and any references to any portions of Treas. Reg. §
1.382-2T shall include any successor provisions):
“4.99-percent Transaction” means any Transfer described in clause (i) or (ii) of Section 15.2 of this
Article XV.
“4.99-percent Stockholder” means a Person or group of Persons that is a “5-percent stockholder” of the
Corporation pursuant to Treas. Reg. § 1.382-2T(g), as applied by replacing “5-percent” with “4.99-
percent” and “five percent” with “4.99 percent,” where applicable.
“Agent” has the meaning set forth in Section 15.5 of this Article XV.
“Board of Directors” means the board of directors of the Corporation.
“Code” means the United States Internal Revenue Code of 1986, as amended from time to time.
“Corporation Security” or “Corporation Securities” means (i) any Stock, (ii) shares of preferred stock
issued by the Corporation (other than preferred stock described in § 1504(a)(4) of the Code), and (iii)
warrants, rights, or options (including options within the meaning of Treas. Reg. § 1.382-2T(h)(4)(v) or
Treas. Reg. § 1.382-4(d)(9)) to purchase securities of the Corporation.

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“Effective Date” means April 27, 2015.
“Excess Securities” has the meaning set forth in Section 15.4 of this Article XV.
“Expiration Date” means the earliest of (i) the close of business on October 3, 2024, (ii) the repeal of
Section 382 of the Code or any successor statute if the Board of Directors determines that this Article XV
is no longer necessary or desirable for the preservation of Tax Benefits, (iii) the close of business on the
first day of a taxable year of the Corporation as to which the Board of Directors determines that no Tax
Benefits may be carried forward or (iv) such date as the Board of Directors shall fix in accordance with
Section 15.12 of this Article XV.
“Percentage Stock Ownership” means the percentage Stock Ownership interest of any Person or group
(as the context may require) for purposes of Section 382 of the Code as determined in accordance with
Treas. Reg. § 1.382-2T(g), (h), (j) and (k) and Treas. Reg. § 1.382-4, or any successor provisions and
other pertinent Internal Revenue Service guidance.
“Person” means any individual, partnership, joint venture, limited liability company, firm, corporation,
unincorporated association or organization, trust or other entity or any group of such “Persons” having a
formal or informal understanding among themselves to make a “coordinated acquisition” of shares within
the meaning of Treas. Reg. § 1.382-3(a)(1) or who are otherwise treated as an “entity” within the meaning
of Treas. Reg. § 1.382-3(a)(1), and shall include any successor (by merger or otherwise) of any such
entity or group.
“Prohibited Distributions” means any and all dividends or other distributions paid by the Corporation
with respect to any Excess Securities received by a Purported Transferee.
“Prohibited Transfer” means any Transfer or purported Transfer of Corporation Securities to the extent
that such Transfer is prohibited and/or void under this Article XV.
“Public Group” has the meaning set forth in Treas. Reg. § 1.382-2T(f)(13).
“Purported Transferee” has the meaning set forth in Section 15.4 of this Article XV.
“Remedial Holder” has the meaning set forth in Section 15.7 of this Article XV.
“Stock” means any interest that would be treated as “stock” of the Corporation pursuant to Treas. Reg.
§ 1.382-2T(f)(18).
“Stock Ownership” means any direct or indirect ownership of Stock, including any ownership by virtue
of application of constructive ownership rules, with such direct, indirect and constructive ownership
determined under the provisions of Section 382 of the Code and the Treasury Regulations thereunder,
including, for the avoidance of doubt, any ownership whereby a Person owns Stock pursuant to a
“coordinated acquisition” treated as a single “entity” as defined in Treas. Reg. § 1.382-3(a)(1), or such
Stock is otherwise aggregated with Stock owned by such Person pursuant to the provisions of Section 382
of the Code and the Treasury Regulations thereunder.
“Tax Benefits” means the net operating loss carryforwards, capital loss carryforwards, general business
credit carryforwards, alternative minimum tax credit carryforwards and foreign tax credit carryforwards,
as well as any loss or deduction attributable to a “net unrealized built-in loss” of the Corporation or any
direct or indirect subsidiary thereof, within the meaning of Section 382 of the Code.
“Transfer” means, any direct or indirect sale, transfer, assignment, conveyance, pledge or other
disposition, event or occurrence or other action taken by a Person, other than the Corporation, that alters
the Percentage Stock Ownership of any Person or group. A Transfer also shall include the creation or
grant of an option (including an option within the meaning of Treas. Reg. § 1.382-4(d)). For the
avoidance of doubt, a Transfer shall not include the creation or grant of an option by the Corporation, nor
shall a Transfer include the issuance of Stock by the Corporation.

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“Transferee” means any Person to whom Corporation Securities are Transferred.
“Treasury Regulations” or “Treas. Reg.” means the regulations, including temporary regulations or any
successor regulations, promulgated under the Code, as amended from time to time.
15.2 Transfer and Ownership Restrictions. In order to preserve the Tax Benefits, from and after the
Effective Date of this Article XV any attempted Transfer of Corporation Securities prior to the Expiration
Date and any attempted Transfer of Corporation Securities pursuant to an agreement entered into prior to
the Expiration Date shall be prohibited and void ab initio to the extent that, as a result of such Transfer (or
any series of Transfers of which such Transfer is a part), either (i) any Person or Persons would become a
4.99-percent Stockholder or (ii) the Percentage Stock Ownership in the Corporation of any 4.99-percent
Stockholder would be increased. The prior sentence is not intended to prevent Corporation Securities
from being DTC-eligible and shall not preclude the settlement of any transaction in Corporation
Securities entered into through the facilities of a national securities exchange; provided, however, that the
Corporation Securities and parties involved in such transaction shall remain subject to the provisions of
this Article XV in respect of such transaction.
15.3 Exceptions.
A. Notwithstanding anything to the contrary herein, Transfers to a Public Group
(including a new Public Group created under Treas. Reg. § 1.382-2T(j)(3)(i)) shall be permitted.

B. The restrictions set forth in Section 15.2 of this Article XV shall not apply to an
attempted Transfer that is a 4.99-percent Transaction if the transferor or the Transferee obtains
the written approval of the Board of Directors or a duly authorized committee thereof. As a
condition to granting its approval pursuant to this Section 15.3 of this Article XV, the Board of
Directors may, in its discretion, require (at the expense of the transferor and/or Transferee) an
opinion of counsel selected by the Board of Directors that the Transfer shall not result in a
limitation on the use of the Tax Benefits as a result of the application of Section 382 of the Code;
provided that the Board of Directors may grant such approval notwithstanding the effect of such
approval on the Tax Benefits if it determines that the approval is in the best interests of the
Corporation. The Board of Directors may grant its approval in whole or in part with respect to
such Transfer and may impose any conditions that it deems reasonable and appropriate in
connection with such approval, including, without limitation, restrictions on the ability of any
Transferee to Transfer Stock acquired through a Transfer. Approvals of the Board of Directors
hereunder may be given prospectively or retroactively. The Board of Directors, to the fullest
extent permitted by law, may exercise the authority granted by this Article XV through duly
authorized officers or agents of the Corporation. Nothing in this Section 15.3 of this Article XV
shall be construed to limit or restrict the Board of Directors in the exercise of its fiduciary duties
under applicable law.

15.4 Excess Securities.
A. No employee or agent of the Corporation shall record any Prohibited Transfer,
and the purported transferee of such a Prohibited Transfer (the “Purported Transferee”) shall not
be recognized as a stockholder of the Corporation for any purpose whatsoever in respect of the
Corporation Securities which are the subject of the Prohibited Transfer (the “Excess Securities”).
The Purported Transferee shall not be entitled, with respect to such Excess Securities, to any
rights of stockholders of the Corporation, including, without limitation, the right to vote such
Excess Securities and to receive dividends or distributions, whether liquidating or otherwise, in
respect thereof, if any, and the Excess Securities shall be deemed to remain with the transferor
unless and until the Excess Securities are transferred to the Agent pursuant to Section 15.5 of this
Article XV or until an approval is obtained under Section 15.3 of this Article XV. After the

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Excess Securities have been acquired in a Transfer that is not a Prohibited Transfer, the
Corporation Securities shall cease to be Excess Securities. For this purpose, any Transfer of
Excess Securities not in accordance with the provisions of this Section 15.4 or Section 15.5 of
this Article XV shall also be a Prohibited Transfer.

B. The Corporation may require as a condition to the registration of the Transfer of
any Corporation Securities or the payment of any distribution on any Corporation Securities that
the proposed Transferee or payee furnish to the Corporation all information reasonably requested
by the Corporation with respect to its direct or indirect ownership interests in such Corporation
Securities. The Corporation may make such arrangements or issue such instructions to its stock
transfer agent as may be determined by the Board of Directors to be necessary or advisable to
implement this Article XV, including, without limitation, authorizing such transfer agent to
require an affidavit from a Purported Transferee regarding such Person’s actual and constructive
ownership of Stock and other evidence that a Transfer will not be prohibited by this Article XV
as a condition to registering any transfer.

15.5 Transfer to Agent. If the Board of Directors determines that a Transfer of Corporation Securities
constitutes a Prohibited Transfer, then, upon written demand by the Corporation sent within thirty days of
the date on which the Board of Directors determines that the attempted Transfer would result in Excess
Securities, the Purported Transferee shall transfer or cause to be transferred any certificate or other
evidence of ownership of the Excess Securities within the Purported Transferee’s possession or control,
together with any Prohibited Distributions, to an agent designated by the Board of Directors (the
“Agent”). The Agent shall thereupon sell to a buyer or buyers, which may include the Corporation, the
Excess Securities transferred to it in one or more arm’s-length transactions (on the public securities
market on which such Excess Securities are traded, if possible, or otherwise privately); provided,
however, that any such sale must not constitute a Prohibited Transfer and provided, further, that the Agent
shall effect such sale or sales in an orderly fashion and shall not be required to effect any such sale within
any specific time frame if, in the Agent’s discretion, such sale or sales would disrupt the market for the
Corporation Securities or otherwise would adversely affect the value of the Corporation Securities. If the
Purported Transferee has resold the Excess Securities before receiving the Corporation’s demand to
surrender Excess Securities to the Agent, the Purported Transferee shall be deemed to have sold the
Excess Securities for the Agent, and shall be required to transfer to the Agent any Prohibited Distributions
and proceeds of such sale, except to the extent that the Corporation grants written permission to the
Purported Transferee to retain a portion of such sale proceeds not exceeding the amount that the
Purported Transferee would have received from the Agent pursuant to Section 15.6 of this Article XV if
the Agent rather than the Purported Transferee had resold the Excess Securities.
15.6 Application of Proceeds and Prohibited Distributions. The Agent shall apply any proceeds of a
sale by it of Excess Securities and, if the Purported Transferee has previously resold the Excess
Securities, any amounts received by it from a Purported Transferee, together, in either case, with any
Prohibited Distributions, as follows: (i) first, such amounts shall be paid to the Agent to the extent
necessary to cover its costs and expenses incurred in connection with its duties hereunder; (ii) second, any
remaining amounts shall be paid to the Purported Transferee, up to the amount paid by the Purported
Transferee for the Excess Securities (or the fair market value at the time of the Transfer, in the event the
purported Transfer of the Excess Securities was, in whole or in part, a gift, inheritance or similar
Transfer) which amount (or fair market value) shall be determined at the discretion of the Board of
Directors; and (iii) third, any remaining amounts shall be paid to one or more organizations selected by
the Board of Directors which is described under Section 501(c)(3) of the Code (or any comparable
successor provision) and contributions to which are eligible for deduction under each of Sections
170(b)(1)(A), 2055 and 2552 of the Code. The Purported Transferee of Excess Securities shall have no
claim, cause of action or any other recourse whatsoever against any transferor of Excess Securities. The

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Purported Transferee’s sole right with respect to such shares shall be limited to the amount payable to the
Purported Transferee pursuant to this Section 15.6 of this Article XV. In no event shall the proceeds of
any sale of Excess Securities pursuant to this Section 15.6 of this Article XV inure to the benefit of the
Corporation or the Agent, except to the extent used to cover costs and expenses incurred by Agent in
performing its duties hereunder.
15.7 Modification of Remedies For Certain Indirect Transfers. In the event of any Transfer which
does not involve a transfer of Corporation Securities within the meaning of Delaware law but which
would cause a 4.99-percent Stockholder to violate a restriction on Transfers provided for in this Article
XV, the application of Sections 15.5 and 15.6 of this Article XV shall be modified as described in this
Section 15.7 of this Article XV. In such case, no such 4.99-percent Stockholder shall be required to
dispose of any interest that is not a Corporation Security, but such 4.99-percent Stockholder and/or any
Person whose ownership of Corporation Securities is attributed to such 4.99-percent Stockholder (such
4.99-percent Stockholder or other Person, a “Remedial Holder”) shall be deemed to have disposed of and
shall be required to dispose of sufficient Corporation Securities (which Corporation Securities shall be
disposed of in the inverse order in which they were acquired) to cause such 4.99-percent Stockholder,
following such disposition, not to be in violation of this Article XV. Such disposition shall be deemed to
occur simultaneously with the Transfer giving rise to the application of this provision, and such number
of Corporation Securities that are deemed to be disposed of shall be considered Excess Securities and
shall be disposed of through the Agent as provided in Sections 15.5 and 15.6 of this Article XV, except
that the maximum aggregate amount payable to a Remedial Holder in connection with such sale shall be
the fair market value of such Excess Securities at the time of the purported Transfer. A Remedial Holder
shall not be entitled, with respect to such Excess Securities, to any rights of stockholders of the
Corporation, including, without limitation, the right to vote such Excess Securities and to receive
dividends or distributions, whether liquidating or otherwise, in respect thereof, if any, following the time
of the purported Transfer. All expenses incurred by the Agent in disposing of such Excess Stock shall be
paid out of any amounts due such 4.99-percent Stockholder or such other Person. The purpose of this
Section 15.7 of this Article XV is to extend the restrictions in Sections 15.2 and 15.5 of this Article XV to
situations in which there is a 4.99-percent Transaction without a direct Transfer of Corporation Securities,
and this Section 15.7 of this Article XV, along with the other provisions of this Article XV, shall be
interpreted to produce the same results, with differences as the context requires, as a direct Transfer of
Corporation Securities.
15.8 Legal Proceedings; Prompt Enforcement. If the Purported Transferee fails to surrender the
Excess Securities or the proceeds of a sale thereof to the Agent within thirty days from the date on which
the Corporation makes a written demand pursuant to Section 15.5 of this Article XV (whether or not
made within the time specified in Section 15.5 of this Article XV), then the Corporation may take such
actions as it deems appropriate to enforce the provisions hereof, including the institution of legal
proceedings to compel the surrender. Nothing in this Section 15.8 of this Article XV shall (i) be deemed
inconsistent with any Transfer of the Excess Securities provided in this Article XV being void ab initio,
(ii) preclude the Corporation in its discretion from immediately bringing legal proceedings without a prior
demand or (iii) cause any failure of the Corporation to act within the time periods set forth in Section 15.5
of this Article XV to constitute a waiver or loss of any right of the Corporation under this Article XV.
The Board of Directors may authorize such additional actions as it deems advisable to give effect to the
provisions of this Article XV.
15.9 Liability. To the fullest extent permitted by law, any stockholder subject to the provisions of this
Article XV who knowingly violates the provisions of this Article XV and any Persons controlling,
controlled by or under common control with such stockholder shall be jointly and severally liable to the
Corporation for, and shall indemnify and hold the Corporation harmless against, any and all damages
suffered as a result of such violation, including but not limited to damages resulting from a reduction in,

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or elimination of, the Corporation’s ability to utilize its Tax Benefits, and attorneys’ and auditors’ fees
incurred in connection with such violation.
15.10 Obligation to Provide Information. As a condition to the registration of the Transfer of any
Stock, any Person who is a beneficial, legal or record holder of Stock, and any proposed Transferee and
any Person controlling, controlled by or under common control with the proposed Transferee, shall
provide such information as the Corporation may request from time to time in order to determine
compliance with this Article XV or the status of the Tax Benefits of the Corporation.
15.11 Legends. The Board of Directors may require that any certificates issued by the Corporation
evidencing ownership of shares of Stock that are subject to the restrictions on transfer and ownership
contained in this Article XV bear the following legend:
“THE SEVENTH AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF THE
CORPORATION (THE “CERTIFICATE OF INCORPORATION”) CONTAINS RESTRICTIONS
PROHIBITING THE TRANSFER (AS DEFINED IN THE CERTIFICATE OF INCORPORATION) OF
STOCK OF THE CORPORATION (INCLUDING THE CREATION OR GRANT OF CERTAIN
OPTIONS, RIGHTS AND WARRANTS) WITHOUT THE PRIOR AUTHORIZATION OF THE
BOARD OF DIRECTORS OF THE CORPORATION (THE “BOARD OF DIRECTORS”) IF SUCH
TRANSFER AFFECTS THE PERCENTAGE OF STOCK OF THE CORPORATION (WITHIN THE
MEANING OF SECTION 382 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED
(THE “CODE”) AND THE TREASURY REGULATIONS PROMULGATED THEREUNDER) THAT
IS TREATED AS OWNED BY A 4.99-PERCENT STOCKHOLDER (AS DEFINED IN THE
CERTIFICATE OF INCORPORATION). IF THE TRANSFER RESTRICTIONS ARE VIOLATED,
THEN THE TRANSFER WILL BE VOID AB INITIO AND THE PURPORTED TRANSFEREE OF
THE STOCK WILL BE REQUIRED TO TRANSFER EXCESS SECURITIES (AS DEFINED IN THE
CERTIFICATE OF INCORPORATION) TO THE CORPORATION’S AGENT. IN THE EVENT OF A
TRANSFER WHICH DOES NOT INVOLVE SECURITIES OF THE CORPORATION WITHIN THE
MEANING OF THE GENERAL CORPORATION LAW OF THE STATE OF DELAWARE
(“SECURITIES”) BUT WHICH WOULD VIOLATE THE TRANSFER RESTRICTIONS, THE
PURPORTED TRANSFEREE (OR THE RECORD OWNER) OF THE SECURITIES THAT VIOLATE
THE TRANSFER RESTRICTIONS WILL BE REQUIRED TO TRANSFER SUFFICIENT
SECURITIES PURSUANT TO THE TERMS PROVIDED FOR IN THE CERTIFICATE OF
INCORPORATION TO CAUSE THE 4.99-PERCENT STOCKHOLDER TO NO LONGER BE IN
VIOLATION OF THE TRANSFER RESTRICTIONS. THE CORPORATION WILL FURNISH
WITHOUT CHARGE TO THE HOLDER OF RECORD OF THIS CERTIFICATE A COPY OF THE
CERTIFICATE OF INCORPORATION CONTAINING THE ABOVE-REFERENCED TRANSFER
RESTRICTIONS UPON WRITTEN REQUEST TO THE CORPORATION AT ITS PRINCIPAL
PLACE OF BUSINESS.”
The Board of Directors may also require that any certificates issued by the Corporation evidencing
ownership of shares of Stock that are subject to conditions imposed by the Board of Directors under
Section 15.3 of this Article XV also bear a conspicuous legend referencing the applicable restrictions.
15.12 Authority of Board of Directors.
A. The Board of Directors shall have the power to determine all matters necessary
for assessing compliance with this Article XV, including, without limitation, (i) the identification
of 4.99-percent Stockholders, (ii) whether a Transfer is a 4.99-percent Transaction or a Prohibited
Transfer, (iii) the Percentage Stock Ownership in the Corporation of any 4.99-percent
Stockholder, (iv) whether an instrument constitutes a Corporation Security, (v) the amount (or
fair market value) due to a Purported Transferee pursuant to Section 15.6 of this Article XV, and
(vi) any other matters which the Board of Directors determines to be relevant; and the good faith
determination of the Board of Directors on such matters shall be conclusive and binding for all

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the purposes of this Article XV. In addition, the Board of Directors may, to the extent permitted
by law, from time to time establish, modify, amend or rescind by-laws, regulations and
procedures of the Corporation not inconsistent with the provisions of this Article XV for purposes
of determining whether any Transfer of Corporation Securities would jeopardize or endanger the
Corporation’s ability to preserve and use the Tax Benefits and for the orderly application,
administration and implementation of this Article XV.

B. Nothing contained in this Article XV shall limit the authority of the Board of
Directors to take such other action to the extent permitted by law as it deems necessary or
advisable to protect the Corporation and its stockholders in preserving the Tax Benefits. Without
limiting the generality of the foregoing, in the event of a change in law making one or more of the
following actions necessary or desirable, the Board of Directors may, by adopting a written
resolution, (i) accelerate the Expiration Date, (ii) modify the ownership interest percentage in the
Corporation or the Persons or groups covered by this Article XV, (iii) modify the definitions of
any terms set forth in this Article XV or (iv) modify the terms of this Article XV as appropriate,
in each case, in order to prevent an ownership change for purposes of Section 382 of the Code as
a result of any changes in applicable Treasury Regulations or otherwise; provided, however, that
the Board of Directors shall not cause there to be such acceleration or modification unless it
determines, by adopting a written resolution, that such action is reasonably necessary or advisable
to preserve the Tax Benefits or that the continuation of these restrictions is no longer reasonably
necessary for the preservation of the Tax Benefits. Stockholders of the Corporation shall be
notified of such determination through a filing with the Securities and Exchange Commission or
such other method of notice as the Secretary of the Corporation shall deem appropriate.

C. In the case of an ambiguity in the application of any of the provisions of this
Article XV, including any definition used herein, the Board of Directors shall have the power to
determine the application of such provisions with respect to any situation based on its reasonable
belief, understanding or knowledge of the circumstances. In the event this Article XV requires an
action by the Board of Directors but fails to provide specific guidance with respect to such action,
the Board of Directors shall have the power to determine the action to be taken so long as such
action is not contrary to the provisions of this Article XV. All such actions, calculations,
interpretations and determinations which are done or made by the Board of Directors in good
faith shall be conclusive and binding on the Corporation, the Agent, and all other parties for all
other purposes of this Article XV. The Board of Directors may delegate all or any portion of its
duties and powers under this Article XV to a committee of the Board of Directors as it deems
necessary or advisable and, to the fullest extent permitted by law, may exercise the authority
granted by this Article XV through duly authorized officers or agents of the Corporation.
Nothing in this Article XV shall be construed to limit or restrict the Board of Directors in its
exercise of its fiduciary duties under applicable law.

15.13 Reliance. To the fullest extent permitted by law, the Corporation and the members of the Board
of Directors shall be fully protected in relying in good faith upon the information, opinions, reports or
statements of the chief executive officer, the chief financial officer, the chief accounting officer or the
corporate controller of the Corporation and the Corporation’s legal counsel, independent auditors, transfer
agent, investment bankers or other employees and agents in making the determinations and findings
contemplated by this Article XV. The members of the Board of Directors shall not be responsible for any
good faith errors made in connection therewith. For purposes of determining the existence and identity
of, and the amount of any Corporation Securities owned by, any stockholder, the Corporation is entitled
to rely on the existence and absence of filings of Schedule 13D or 13G under the Securities and Exchange
Act of 1934, as amended (or similar filings), as of any date, subject to its actual knowledge of the
ownership of Corporation Securities.

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15.14 Benefits of This Article XV. Nothing in this Article XV shall be construed to give to any Person
other than the Corporation or the Agent any legal or equitable right, remedy or claim under this Article
XV. This Article XV shall be for the sole and exclusive benefit of the Corporation and the Agent.
15.15 Severability. The purpose of this Article XV is to facilitate the Corporation’s ability to maintain
or preserve its Tax Benefits. If any provision of this Article XV or the application of any such provision
to any Person or under any circumstance shall be held invalid, illegal or unenforceable in any respect by a
court of competent jurisdiction, such invalidity, illegality or unenforceability shall not affect any other
provision of this Article XV.
15.16 Waiver. With regard to any power, remedy or right provided herein or otherwise available to the
Corporation or the Agent under this Article XV, (i) no waiver will be effective unless expressly contained
in a writing signed by the waiving party and (ii) no alteration, modification or impairment will be implied
by reason of any previous waiver, extension of time, delay or omission in exercise or other indulgence.
THIRD: That, pursuant to resolution of its Board of Directors, an annual meeting of the
stockholders of the Corporation was duly called and held, upon notice in accordance with Section 222 of
the General Corporation Law of the State of Delaware, at which meeting the necessary number of shares
as required by applicable law was voted in favor of the Amendment.

FOURTH: That said Amendment was duly adopted in accordance with the provisions of Section
242 of the General Corporation Law of the State of Delaware.

IN WITNESS WHEREOF, the Corporation has caused this Certificate of Amendment of the
Seventh Amended and Restated Certificate of Incorporation to be executed on this ___ day of _____,
2020.

CROSSROADS SYSTEMS, INC.

By:
Name:
Title:

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