Exhibit 10.4

The indebtedness and securities evidenced hereby are subordinated in accordance
with and subject to the terms of that certain Subordination Agreement (as
amended, restated, supplemented or modified from time to time, the
“Subordination Agreement”), dated as of January 25, 2017, by and among Jackson
Investment Group, LLC, a Georgia limited liability company, (“Subordinated
Lender”), Staffing 360 Solutions, Inc., a Nevada corporation (“Parent”), certain
of the Parent’s subsidiaries party thereto and MidCap Funding X Trust, in its
capacity as agent (together with its affiliates and their respective successors
and assigns, “Senior Agent”) for the Senior Lenders (as defined in the
Subordination Agreement), and each holder and transferee of this instrument or
agreement, by its acceptance hereof, irrevocably agrees to be bound by the
provisions of the Subordination Agreement.

Execution Version

PLEDGE AGREEMENT

THIS PLEDGE AGREEMENT (this “Agreement”) is made and entered into as of January
25, 2017, by and among STAFFING 360 SOLUTIONS, INC., a Nevada corporation (the
“Issuer”), FARO RECRUITMENT AMERICA, INC., a New York corporation (“Faro”),
MONROE STAFFING SERVICES, LLC, a Delaware limited liability company (“Monroe”),
PEOPLESERVE, INC., a Massachusetts corporation (“PSI”), PEOPLESERVE PRS, INC., a
Massachusetts corporation (“PRS”), LIGHTHOUSE PLACEMENT SERVICES, INC., a
Massachusetts corporation (“Lighthouse” and together with the Issuer, Faro,
Monroe, PSI and PRS, collectively, the “Pledgors”) in favor of JACKSON
INVESTMENT GROUP, LLC, as the secured party (the “Secured Party”).

W I T N E S S E T H:

WHEREAS, pursuant to and subject to the terms and conditions of that certain
Note and Warrant Purchase Agreement, dated as of even date herewith (as amended,
restated, supplemented or otherwise modified from time to time, the “Purchase
Agreement”; capitalized terms used but not otherwise defined herein shall have
the meanings assigned thereto in the Purchase Agreement) by and among the
Pledgors, certain other subsidiaries of the Issuer and the Secured Party, the
Issuer will issue and sell a Subordinated Secured Promissory Note, dated as of
the date hereof in the principal amount of $7,400,000 (together with any other
notes issued in substitution or replacement thereof, and as may be amended,
restated, supplemented or otherwise modified from time to time, the “Note”) and
a Warrant to purchase shares of the Issuer’s Common Stock (“Warrant”) to the
Secured Party in exchange for $7,400,000 in aggregate purchase price
consideration paid by the Secured Party to the Issuer;

WHEREAS, each of the direct and indirect subsidiaries of the Issuer will derive
substantial direct and indirect benefits from the transactions contemplated by
the Purchase Agreement including the funding of the Advance by the Secured Party
to the Issuer and have therefore guaranteed all of the obligations of the Issuer
to the Secured Party under the Purchase Agreement and the other Note Documents;

WHEREAS, as a condition to the effectiveness of the Purchase Agreement and the
Secured Party’s obligation to purchase the Note and make the Advance specified
therein, the Pledgors are required to execute and deliver this Agreement for the
benefit of the Secured Party to secure all of the Secured Obligations (as
defined below); and  

 

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WHEREAS, Pledgors own a certain percentage of all of the outstanding membership
interests, partnership interests or shares of stock of the respective
subsidiaries of the Pledgors, as indicated on Schedule I attached hereto and
incorporated herein by this reference (each such subsidiary is referred to
herein as a “Pledged Entity” and, collectively, the “Pledged Entities”).

NOW, THEREFORE, in consideration of these premises and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, each Pledgor hereby agrees in favor of Secured Party as follows:

1. SECURITY FOR OBLIGATIONS, ETC.  

This Agreement is for the benefit of Secured Party and is security for the
prompt payment in full when due, whether at stated maturity, by acceleration or
otherwise of the following obligations of the Pledgors, whether presently
existing or hereafter incurred or arising: (i) in the case of the Pledgors, all
of the Obligations (as such term is defined in the Purchase Agreement), (ii) in
the case of each Pledgor (other than the Issuer), all obligations of such
Pledgor in respect of its guarantee set forth in Article 4 of the Purchase
Agreement,  and (iii) all reasonable, documented out-of-pocket costs and
expenses incurred in connection with the enforcement and collection of the
obligations described in the immediately preceding clause (i) and (ii), and the
enforcement of this Agreement, the Purchase Agreement, the Note and the other
Note Documents (as such term is defined in the Purchase Agreement against the
Pledgor), including but not limited to the reasonable, documented out-of-pocket
fees, charges and disbursements of counsel to the Secured Party (all such
obligations described in the foregoing clauses (i), (ii) and (iii) are referred
to herein collectively as the “Secured Obligations”).

2. PLEDGED INTERESTS.

2.1. Pledged Interests.  As used herein, the term “Pledged Interests” shall mean
any and all shares of the outstanding membership interests, limited partnership
interests, capital stock or other equity interests (as the case may be) of the
Pledged Entities that Pledgors may now or hereafter own, control or hold, which
shares and interests as of this date are described on Schedule I attached
hereto.

2.2. Pledgor’s Representations and Warranties.  Each Pledgor represents and
warrants to Secured Party that, on the date hereof, (a) the Pledged Interests
owned by Pledgor are shown on Schedule I attached hereto, (b) Pledgor is the
holder of record and beneficial owner of such Pledged Interests, (c) such
Pledged Interests constitute the percentage of the issued and outstanding
membership interests, limited partnership interests, capital stock or other
equity interests of the Pledged Entities shown on Schedule I, (d) in the case of
such Pledged Interests that constitute membership interests or limited
partnership interests, such Pledged Interests are not represented by
certificates, but each such interest constitutes a “security” within the meaning
of Article 8 of the Code, and (e) each Pledgor has rights in and the power to
transfer each item of the Collateral upon which it purports to grant a Lien
hereunder free and clear of any and all Liens except as expressly permitted
under the Purchase Agreement.

3. PLEDGE OF SECURITIES; ETC.

3.1. Pledge.  Subject to the terms and conditions hereof, and in order to secure
the Secured Obligations, each Pledgor hereby pledges to Secured Party for its
benefit all of its rights, titles and interests in and to the Pledged Interests,
together with (i) subject to the rights of Pledgor set forth in Section 5, all
dividends and distributions (whether in cash, shares, warrants, options, or
other interests or securities), cash, instruments or other property from time to
time received, receivable or otherwise distributed in respect of or in exchange
for any or all of the Pledged Interests, and (ii) all cash and non-cash proceeds
of the foregoing, and each Pledgor hereby grants to Secured Party a present and
continuing

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security interest in, and hereby assigns, transfers, interests, hypothecates and
sets over to Secured Party, all of such Pledgor’s rights, titles and interests
in and to the Pledged Interests (and in and to any certificates or instruments
evidencing the items described in clauses (i) and (ii) above) to be held by
Secured Party, upon the terms and conditions set forth in this Agreement.  In
the event that any of the Pledged Interests are hereafter represented by
certificates, the applicable Pledgor shall give Secured Party prompt written
notice thereof and shall deliver to Secured Party any and all certificates
representing the Pledged Interests accompanied by undated transfer powers duly
executed in blank by such Pledgor and any and all certificates and instruments
evidencing the items described in clauses (i) and (ii) above promptly upon such
Pledgor’s receipt thereof.

3.2. Definition of Pledged Securities and Collateral.  The Pledged Interests and
all items described in clause (i) of Section 3.1 are hereinafter collectively
called the “Pledged Securities”,  and the Pledged Securities, together with all
other securities and moneys received and at the time held by Secured Party
hereunder and any cash or non-cash proceeds of any of the foregoing are
hereinafter collectively called the “Collateral”.

4. VOTING; ETC.  Unless an Event of Default (as defined below) has occurred and
is continuing and Secured Party has elected to exercise any of its rights and
remedies under Section 6, Pledgors shall be entitled to vote any and all of the
Pledged Securities and to give consents, waivers or ratifications in respect
thereof; provided that no vote shall be cast or any consent, waiver or
ratification given or any action taken which would violate or be inconsistent
with any of the terms of this Agreement or the Purchase Agreement.  All such
rights of Pledgors to vote and to give consents, waivers and ratifications shall
cease upon receipt of notice from Secured Party during the continuance of any
Event of Default (as defined below) that Secured Party has elected to exercise
its rights and remedies under Section 6 below.

5. DIVIDENDS AND OTHER DISTRIBUTIONS.

5.1. Rights of Secured Party and Pledgor Prior to Event of Default.  Unless an
Event of Default (as defined below) shall have occurred and be continuing or be
caused thereby, all cash dividends or distributions payable in respect of the
Pledged Securities shall be paid to Pledgors as their interests may appear,
which cash dividends or distributions shall no longer be part of the
Collateral.  Secured Party shall be entitled to receive directly, and to retain
as part of the Collateral:

(a) all other or additional interests, shares, or other securities paid or
distributed by way of dividend or otherwise in respect of any of the Pledged
Securities;

(b) all other or additional interests, shares, or other securities paid or
distributed in respect of any of the Pledged Securities by way of stock-split,
reclassification, combination of shares or similar rearrangement; and

(c) all other or additional shares, interests, or other securities which may be
paid in respect of any of the Pledged Securities by reason of any consolidation,
merger, exchange of stock, conveyance of assets, liquidation or similar
reorganization provided such consolidation.

5.2. Additional Interests or Shares.  Each Pledgor agrees and covenants that,
unless Secured Party consents otherwise in writing, it will cause the Pledged
Entities not to issue any shares of any class of such Pledged Entity’s
membership interests, limited partnership interests, capital stock or other
equity interests to Pledgor in addition to or in substitution for any of the
Pledged Interests, except any such membership interests, limited partnership
interests, capital stock or other equity interests pledged to Secured Party
pursuant to this Agreement.  Any additional membership interests, limited

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partnership interests, shares of capital stock or other equity interests of any
class of any Pledged Entity which may be hereafter acquired by any Pledgor shall
automatically become part of the Pledged Interests covered hereby and such
Pledgor shall promptly deliver to Secured Party any and all certificates
evidencing the same accompanied by undated stock powers duly executed in blank
by such Pledgor.

6. EVENTS OF DEFAULT.

6.1. Definition of Events of Default.  Any of the following specified events
shall constitute an “Event of Default” under this Agreement:

(a) the occurrence of any Event of Default (as such term is defined in any of
the Purchase Agreement);

(b) any representation, warranty or statement made or deemed to be made by any
Pledgor under or in connection with this Agreement shall have been false or
misleading in any material respect when made or deemed to be made; or

(c) any Pledgor shall fail to observe or perform any covenant or agreement set
forth in this Agreement.

6.2. Remedies.  In case an Event of Default shall have occurred and be
continuing, Secured Party shall be entitled to exercise all of the rights,
powers and remedies (whether vested in Secured Party by this Agreement, any
other Note Document or by law and including, without limitation, all rights and
remedies of a secured party under the Code (as defined below) for the protection
and enforcement of its rights in respect of the Collateral), and Secured Party
shall be entitled, without limitation, to exercise the following rights:

(a) to receive all amounts payable in respect of the Collateral otherwise
payable under Section 5 to any of the Pledgors and to enforce the payment of the
Pledged Securities and to exercise any and all of the rights, powers, and
remedies of any Pledgor thereunder;

(b) subject only to applicable law, upon foreclosure or otherwise to the extent
permitted under Applicable Law to transfer all or any part of the Collateral
into Secured Party’s name or the name of its nominee or nominees;

(c) subject only to applicable law, after delivery of notice as provided in
Section 4, to vote all or any part of the Collateral (whether or not transferred
into the name of Secured Party) and give all consents, waivers and ratifications
in respect of the Collateral and otherwise act with respect thereto as though
Secured Party was the outright owner thereof;

(d) subject only to applicable law, at any time or from time to time to sell,
assign and deliver, or grant options to purchase, all or any part of the
Collateral in one or more parcels, or any interest therein, at any public or
private sale at any exchange, broker’s board or at any of Secured Party’s
offices or elsewhere, without demand of performance, advertisement or notice of
intention to sell or of the time or place of sale or adjournment thereof or to
redeem or otherwise (all of which are hereby expressly and irrevocably waived by
each Pledgor), for cash, on credit or for other property, for immediate or
future delivery without any assumption of credit risk, and for such price or
prices and on such terms as Secured Party in its reasonable discretion may
determine.  Each Pledgor agrees that to the extent that notice of sale shall be
required by any applicable law that ten (10) days’ notice to Pledgor of the time
and place of any public sale or the time after which any private sale is to be
made shall constitute reasonable notification.  Secured Party shall not be
obligated to make any sale of Collateral regardless of notice of sale having

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been given.  Secured Party may adjourn any public or private sale from time to
time by announcement at the time and place fixed therefor, and any such sale
may, without further notice, be made at the time and place to which it was so
adjourned.  Each Pledgor hereby waives and releases to the fullest extent
permitted by law any right or equity of redemption with respect to the
Collateral, whether before or after sale hereunder.  At any such sale, unless
prohibited by applicable law, Secured Party may bid for and purchase all or any
part of the Collateral so sold free from any such right or equity of
redemption.  Secured Party shall not be liable for failure to collect or realize
upon any or all of the Collateral or for any delay in so doing nor shall it be
under any obligation to take any action whatsoever with regard thereto;

(e) to settle, adjust, compromise and arrange all accounts, controversies,
questions, claims and demands whatsoever in relation to all or any part of the
Collateral;

(f) to execute all contracts, agreements, documents and instruments to bring,
defend and abandon all such actions, suits and proceedings and to take all other
actions in relation to all or any part of the Collateral as Secured Party in
their reasonable discretion may determine;

(g) to appoint managers, agents, officers and servants for any of the purposes
mentioned in the foregoing provisions of this Section 6.2 and to dismiss the
same, all as Secured Party in their reasonable discretion may determine;

(h) generally, to take all such other action as Secured Party reasonably may
determine as incidental or conducive to any of the matters or powers mentioned
in the foregoing provisions of this Section 6.2 and which Secured Party may or
can do lawfully and to use the name of any Pledgor for the purposes aforesaid
and in any proceedings arising therefrom.

For purposes of this Agreement, “Code” means the Uniform Commercial Code as the
same may, from time to time, be enacted and in effect in the State of New York;
provided, that to the extent that the Code is used to define any term herein and
such term is defined differently in different Articles or Divisions of the Code,
the definition of such term contained in Article or Division 9 shall govern;
provided further, that in the event that, by reason of mandatory provisions of
law, any or all of the attachment, perfection or priority of, or remedies with
respect to, Secured Party’s Lien on any Collateral is governed by the Uniform
Commercial Code as enacted and in effect in a jurisdiction other than the State
of New York, the term “Code” shall mean the Uniform Commercial Code as enacted
and in effect in such other jurisdiction solely for purposes of the provisions
thereof relating to such attachment, perfection, priority or remedies and for
purposes of definitions related to such provisions.

7. REMEDIES, ETC., CUMULATIVE. Each right, power and remedy of Secured Party
provided for in this Agreement, in any Purchase Agreement or in any other Note
Document or now or hereafter existing at law or in equity or by statute shall be
cumulative and concurrent and shall be in addition to every other such right,
power or remedy.  The exercise or beginning of the exercise by Secured Party of
any one or more of the rights, powers or remedies provided for in this
Agreement, in the Purchase Agreement or any other Note Document or now or
hereafter existing at law or in equity or by statute or otherwise shall not
preclude the simultaneous or later exercise by Secured Party of all such other
rights, powers or remedies, and no failure or delay on the part of Secured Party
to exercise any such right, power or remedy shall operate as a waiver thereof.

8. APPLICATION OF PROCEEDS.  All moneys collected by Secured Party upon any
sale, collection or other disposition of any of the Collateral, together with
all other moneys received by Secured Party hereunder, shall be applied as
follows:

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First, to the payment of the costs and expenses of such sale, collection or
other realization, including, without limitation, reasonable attorneys’ fees and
all other reasonable expenses, liabilities and advances made or incurred by
Secured Party in connection therewith;

Second, to the payment of the Secured Obligations then due in such order as
Secured Party may elect; and

Third, after payment in full of all Secured Obligations then due, to Pledgors as
their interests may appear or to their successors or permitted assigns, or to
whomsoever may be lawfully entitled to receive the same or as a court of
competent jurisdiction may direct any surplus then remaining from such proceeds.

Each Pledgor shall remain liable to the Secured Party for any deficiency owing
on the Secured Obligations after the application of the proceeds of the
Collateral as provided above.

9. PURCHASERS OF COLLATERAL.  Upon any sale of any of the Collateral hereunder
(whether by virtue of the power of sale herein granted, pursuant to judicial
process or otherwise), the receipt of Secured Party or the officer making the
sale shall be a sufficient discharge to the purchaser or purchasers of the
Collateral so sold, and such purchaser or purchasers shall not be obligated to
see to the application of any part of the purchase money paid over to Secured
Party or such officer or be answerable in any way for the misapplication or
nonapplication thereof.

10. FURTHER ASSURANCES.  Each Pledgor agrees that Pledgor will do such acts and
things and promptly execute and deliver (and cause the Pledged Entities to
promptly execute and deliver) to Secured Party such financing statements or
additional conveyances, assignments, agreements and instruments as Secured Party
may reasonably require to perfect and maintain the perfection of Secured Party’s
Liens hereunder in the Collateral and to otherwise carry into effect the
purposes of this Agreement or to further assure and confirm unto Secured Party
its rights, powers and remedies hereunder.  Without limiting the generality of
the foregoing, each Pledgor hereby irrevocably authorizes Secured Party at any
time and from time to time to file in any filing office any Uniform Commercial
Code financing statements and amendments thereto (or equivalents thereof in any
foreign countries) that indicate the Collateral and contain any other
information required for the sufficiency or filing office acceptance of any
financing statement or amendment (or equivalents thereof in any foreign
countries), including whether Pledgor is an organization, the type of
organization and any organization identification number issued to Pledgor.

11. STANDARD OF CARE.  Secured Party shall be deemed to have exercised
reasonable care in the custody and preservation of the Collateral in its
possession if the Collateral is accorded treatment substantially equal to that
which Secured Party accords its own property, it being understood that Secured
Party shall not have responsibility for (i) ascertaining or taking action with
respect to calls, conversions, exchanges, maturities, tenders or other matters
relative to any Collateral, whether or not Secured Party has or is deemed to
have knowledge of such matters, or (ii) taking any necessary steps to preserve
rights against any parties with respect to any Collateral.

12. REPRESENTATIONS AND WARRANTIES.  Each Pledgor hereby represents and warrants
that: (i) it is the legal record and beneficial owner of, and has good and
marketable title to, the Pledged Interests described in Section 2 hereof,
subject to no Lien whatsoever (other than Liens in favor of Secured Party), (ii)
Pledgor has full power, authority and legal right to pledge all the Pledged
Securities and the other Collateral pursuant to this Agreement, (iii) the
delivery of possession of the pledged certificates with indorsements in blank to
Secured Party (in the case of any certificated Pledged Interests) and the filing
of any appropriate financing statements (or equivalents thereof in any foreign
countries), no consent of any other party (including, without limitation, any
other creditor of Pledgor) and no order,

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consent, license, permit, approval, validation or authorization of, exemption
by, notice to or registration, recording, filing or declaration with, any
governmental or public body or authority is required to be obtained by Pledgor
in connection with the execution, delivery or performance of this Agreement or
consummation of the transactions contemplated hereby, including, without
limitation, the exercise by Secured Party of the voting or other rights provided
for in this Agreement or the remedies in respect of the Collateral pursuant to
this Agreement (except, in each instance, as may be required in connection with
the disposition of the Pledged Securities by laws affecting the offering and
sale of securities generally and the healthcare laws and regulations of the
United States and the states in which the Pledged Entities conduct business),
(iv) all of the Pledged Interests have been duly and validly issued, are fully
paid and, where applicable, nonassessable, and (v) the delivery of possession of
the pledged certificates with indorsements in blank to Secured Party and the
filing of any appropriate financing statements (or equivalents thereof in any
foreign countries), the pledge and delivery of the Pledged Securities pursuant
to this Agreement creates a valid and perfected first priority security interest
in the Pledged Securities, and the proceeds thereof, which security interest is
not subject to any prior Lien or any agreement purporting to grant to any third
party a Lien on the property or assets of Pledgor which would include the
Pledged Securities.

13. COVENANTS OF PLEDGORS.  Each Pledgor covenants and agrees that (i) without
the prior written consent of Secured Party, Pledgor will not sell, assign,
transfer, pledge, or otherwise encumber any of its rights in or to the
Collateral, or any unpaid dividends, interest or other distributions or payments
with respect to the Collateral or grant a Lien in the Collateral, unless
otherwise expressly permitted by the Purchase Agreement; (ii) Pledgor will, at
its expense, promptly execute, acknowledge and deliver all such instruments and
take all such actions as Secured Party from time to time may request in order to
ensure to Secured Party the benefits of the Liens in and to the Collateral
intended to be created by this Agreement, including the filing of any necessary
Code financing statements (or equivalents thereof in any foreign countries),
which may be filed by Secured Party with or (to the extent permitted by law)
without the signature of Pledgor, and will cooperate with Secured Party, at
Pledgor’s expense, in obtaining all necessary approvals and making all necessary
filings under federal, state, local or foreign law in connection with such Liens
or any sale or transfer of the Collateral; (iii) Pledgor has and will defend the
title to the Collateral and the Liens of Secured Party in the Collateral against
the claim of any Person and will maintain and preserve such Liens; (iv) Pledgor
will assist the Pledged Entities in defending Secured Party’s right, title and
security interest in and to the Pledged Securities and the proceeds thereof
against the claims and demands of all persons whomsoever; (v) Pledgor will have
like title to and right to pledge any other property at any time hereafter
pledged to Secured Party as Collateral hereunder and will likewise defend the
right thereto and security interest therein of Secured Party; and (vi) Pledgor
will not, with respect to any Collateral, without the prior written consent of
Secured Party enter into any shareholder agreements, voting agreements, voting
trusts, trust deeds, irrevocable proxies or any other similar agreements or
instruments except to the extent permitted under the Purchase Agreement.

14. NOTICES, ETC.  All notices and other communications hereunder to Secured
Party or to any Pledgor shall be given in the manner and to the addresses
specified in Section 10.1 of the Purchase Agreement.

15. POWER OF ATTORNEY. Each Pledgor hereby absolutely and irrevocably
constitutes and appoints Secured Party to be Pledgor’s true and lawful agent and
attorney-in-fact, effective upon the occurrence and during the continuation of
an Event of Default, with full power of substitution, in the name of
Pledgor:  (a) to execute and do all such assurances, acts and things which
Pledgor ought to do but has failed to do under the covenants and provisions
contained in this Agreement; (b) to take any and all such action as Secured
Party may, in their reasonable discretion, determine as necessary for the
purpose of maintaining, preserving or protecting the security constituted by
this Agreement or any of the rights,

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remedies, powers or privileges of Secured Party under this Agreement; and (c)
generally, in the name of Pledgor exercise all or any of the powers,
authorities, and discretions conferred on or reserved to Secured Party by or
pursuant to this Agreement, and (without prejudice to the generality of any of
the foregoing) to seal and deliver or otherwise perfect any instrument or
document of conveyance, agreement, or act as Secured Party reasonably may deem
proper in or for the purpose of exercising any of such powers, authorities or
discretions.  Pledgor hereby ratifies and confirms, and hereby agrees to ratify
and confirm, whatever lawful acts Secured Party shall do or purport to do in the
exercise of the power of attorney granted to Secured Party by Pledgor pursuant
to this Section, which power of attorney, being given for security, is
irrevocable.

16. Lien Absolute.  All rights of Secured Party hereunder, and all obligations
of Pledgor hereunder, shall be absolute and unconditional irrespective of:

(a) any lack of validity or enforceability of any of the Purchase Agreement, any
other Note Documents or any other agreement or instrument governing or
evidencing any Secured Obligations;

(b) any change in the time, manner or place of payment of, or in any other term
of, all or any part of the Secured Obligations, or any other amendment or waiver
of or any consent to any departure from any of the Purchase Agreement, any other
Note Document or any other agreement or instrument governing or evidencing any
Secured Obligations;

(c) any exchange, release or non-perfection of any other Collateral, or any
release or amendment or waiver of or consent to departure from any guaranty, for
all or any of the Secured Obligations;

(d) the insolvency of any Pledgor or any subsidiary thereof; or

(e) any other circumstance which might otherwise constitute a defense available
to, or a discharge of, Pledgor.

17. TERMINATION.  This Agreement and all security interests and other liens
granted or conveyed hereunder shall remain in full force and effect and shall be
irrevocable until the time at which all of the Secured Obligations (other than
contingent indemnification obligations so long as no claim or demand for
indemnification then exists or has then been made) have been indefeasibly paid
in full, at which time this Agreement and all such security interests and other
liens will terminate, subject to reinstatement as provided below.  Each Pledgor
hereby waives any right such Pledgor may have upon payment in full of the
Secured Obligations to require Secured Party to terminate its security interest
in the Collateral or any financing statement relating thereto until this
Agreement is terminated in accordance with the foregoing terms. Effective upon
the consummation of a disposition of any Collateral to any Person (other than
the Pledgors) to the extent such disposition is expressly permitted under the
Purchase Agreement and the application of proceeds thereof in conformity with
the provisions of this Agreement and the Purchase Agreement, the security
interest granted under the Transactions Documents in such Collateral (but not
any of the proceeds thereof) so disposed of will terminate and the Secured Party
shall, upon Issuer’s request and at Issuer’s sole cost and expense, promptly
deliver such releases as may be appropriate to give public notice of such
release, provided, however, the security interest granted under the Note
Documents in all remaining Collateral will remain in full force and
effect.  Each Pledgor agrees that, if any payment made by any Pledgor or other
Person and applied to the Secured Obligations is at any time annulled, avoided,
set aside, rescinded, invalidated, declared to be fraudulent or preferential or
otherwise required to be refunded or repaid, or the proceeds of any Collateral
are required to be returned by Secured Party to such Pledgor, its estate,
trustee, receiver or any other party, including any Pledgor, under any
bankruptcy law, state or federal law, common law or equitable cause, then, to
the extent of such

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payment or repayment, any lien or other Collateral securing such liability shall
be and remain in full force and effect, as fully as if such payment had never
been made.  If any lien or other Collateral securing such Pledgor’s liability
shall have been released or terminated by virtue of this Agreement, such lien,
other Collateral or provision shall be reinstated in full force and effect and
such prior release, termination, cancellation or surrender shall not diminish,
release, discharge, impair or otherwise affect the obligations of any such
Pledgor in respect of any lien or other Collateral securing such obligation or
the amount of such payment.

18. MISCELLANEOUS.  This Agreement shall create a continuing security interest
in the Collateral and shall be binding upon the respective heirs, legal
representatives, successors and assigns of Pledgors and shall inure to the
benefit of and be enforceable by Secured Party and its successors and assigns;
provided, however that no Pledgor shall assign any of its rights, duties or
obligations hereunder to any Person without the prior written consent of Secured
Party.  The headings in this Agreement are for purposes of reference only and
shall not limit or define the meaning hereof.  This Agreement may be executed in
any number of counterparts, each of which shall be an original, but all of which
shall constitute one instrument.  In the event that any provision of this
Agreement shall prove to be invalid or unenforceable, such provision shall be
deemed to be severable from the other provisions of this Agreement which shall
remain binding on all parties hereto.  Each Pledgor waives acceptance and notice
of acceptance of this Agreement by Secured Party.  Time is of the essence of
this Agreement.  This Agreement may not be amended or modified except by a
written instrument signed by each of the parties hereto.  On and after the
effective time of the consummation of the Reincorporation, all references herein
to the “Issuer” shall be deemed to refer to Staffing 360 Solutions, Inc., a
Delaware corporation, as successor by merger to the Issuer.

19. GOVERNING LAW; CONSENT TO SERVICE OF PROCESS; WAIVER OF JURY TRIAL.  This
Agreement, including all matters of construction, validity, enforcement and
interpretation, shall be governed by, and construed in accordance with, the laws
of the State of NEW YORK, without regard to conflicts of laws principles, and
any applicable laws of the United States.  THE TERMS OF SECTIONS 10.6, 10.12 AND
10.13 OF THE PURCHASE AGREEMENT WITH RESPECT TO GOVERNING LAW, consent to
service of process AND WAIVER OF JURY TRIAL ARE INCORPORATED HEREIN BY
REFERENCE, MUTATIS MUTANDIS, AND THE PARTIES HERETO AGREE TO SUCH TERMS.    

20. ENTIRE AGREEMENT.  This Agreement, together with all instruments,
certificates and documents executed or delivered by the parties in connection
herewith or with reference hereto, embodies the entire understanding and
agreement between the parties hereto with respect to the Collateral and
supersedes all prior agreements, understandings and inducements, whether express
or implied, or oral or written.

21. MidCap Intercreditor Agreement; Possession and Control of Collateral.

(a) Notwithstanding anything herein to the contrary, the priority of the liens
granted to the Secured Party pursuant to this Agreement and the exercise of the
rights and remedies of the Secured Party hereunder and under any other Note
Document, are subject to the provisions of the MidCap Intercreditor
Agreement.  In the event of any conflict between the terms of the MidCap
Intercreditor Agreement and this Agreement or any other Note Document, the terms
of the MidCap Intercreditor Agreement shall govern and control.  Notwithstanding
anything to the contrary herein, the Secured Party acknowledges and agrees that
no Pledgor shall be required to take or refrain from taking any action at the
request of the Secured Party with respect to the Collateral if such action or
inaction would violate the express terms of the MidCap Intercreditor Agreement.

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(b) Subject to (but without limiting) the foregoing, at any time prior to the
discharge of the Senior Loans (as defined in the MidCap Intercreditor
Agreement), any provision hereof requiring Pledgors to deliver possession of any
Collateral (as defined in the MidCap Intercreditor Agreement) to the Secured
Party or its representatives, or to cause the Secured Party or its
representatives to control any Collateral (as defined in the MidCap
Intercreditor Agreement), shall be deemed to have been complied with if and for
so long as the Agent (as defined in the MidCap Intercreditor Agreement) shall
have such possession or control for the benefit of the Secured Party and as
bailee or sub-agent of the Secured Party as provided in the MidCap Intercreditor
Agreement

(c) Furthermore, at all times prior to the discharge of the Senior Loans (as
defined in the MidCap Intercreditor Agreement), the Secured Party is authorized
by the Pledgors to effect transfers of possessory Collateral (as defined in the
MidCap Intercreditor Agreement) at any time in its possession (and to execute
any "control" or similar agreements with respect thereto and deliver the same
to) the Agent (as defined in the MidCap Intercreditor Agreement) for purposes of
perfection.

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IN WITNESS WHEREOF, the parties hereto have caused this Pledge Agreement to be
duly executed as of the date first written above.

PLEDGORS:

 

STAFFING 360 SOLUTIONS, INC.

 

FARO RECRUITMENT AMERICA, INC.

 

 

 

 

 

 

 

By:

 

/s/ Brendan Flood

 

By:

 

/s/ Brendan Flood  

Name:

 

Brendan Flood

 

Name:

 

Brendan Flood

Title:

 

Executive Chairman

 

Title:

 

Executive Chairman

 

 

 

 

 

 

 

MONROE STAFFING SERVICES, LLC

 

PEOPLESERVE, INC.

 

 

 

 

 

 

 

By:

 

/s/ Brendan Flood

 

By:

 

/s/ Brendan Flood

Name:

 

Brendan Flood

 

Name:

 

Brendan Flood

Title:

 

Executive Chairman

 

Title:

 

Executive Chairman

 

 

 

 

 

 

 

PEOPLESERVE PRS, INC.

 

 

 

 

 

 

 

 

 

 

 

By:

 

/s/ Brendan Flood

 

 

 

 

Name:

 

Brendan Flood

 

 

 

 

Title:

 

Executive Chairman

 

 

 

 

 

 

 

 

 

 

 

LIGHTHOUSE PLACEMENT SERVICES, INC.

 

 

 

 

 

 

 

 

 

 

 

By:

 

/s/ David Faiman

 

 

 

 

Name:

 

David Faiman

 

 

 

 

Title:

 

Secretary and Treasurer

 

 

 

 

 

 

 

 

 

 

 

SECURED PARTY:

 

 

 

 

JACKSON INVESTMENT GROUP, LLC

 

 

 

 

 

 

 

 

 

 

 

By:

 

/s/ Douglas B. Kline

 

 

 

 

Name:

 

Douglas B. Kline

 

 

 

 

Title:

 

Chief Financial Officer

 

 

 

 

 

 

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SCHEDULE I

Pledged Interests

 

Pledged Interests of Pledgors:

 

Issuer

Certificate No.

Number of Shares

Pledged

No. of Issued and Outstanding Shares of Issuer

Percentage of Such Class or Type

Pledgor

Faro Recruitment America, Inc.

Uncertificated

10

10

100%

Staffing 360 Solutions, Inc.

Monroe Staffing Services, LLC

Uncertificated

Uncertificated

Uncertificated

100%

Faro Recruitment America, Inc.

Staffing 360 Solutions Limited

N/A

1,129,872 (value GBP £1,129.87)

1,129,872 (value GBP £1,129.87)

100%

Staffing 360 Solutions, Inc.

Longbridge Recruitment 360 Limited

N/A

495,711 (value GBP £495,711)

495,711 (value GBP £495,711)

100%

Staffing 360 Solutions Limited

The JM Group (IT Recruitment) Limited

N/A

2 (value GBP £2.00)

2 (value GBP £2.00)

100%

Longbridge Recruitment 360 Limited

PeopleSERVE, Inc.

#2

100

100

100%

Staffing 360 Solutions, Inc.

PeopleSERVE PRS, Inc.

#4

1,000

1,000

100%

Staffing 360 Solutions, Inc.

Lighthouse Placement Services, Inc.

N/A

N/A

Uncertificated

100%

Staffing 360 Solutions, Inc.