Exhibit 10.3

 

CONVERSION AGREEMENT

  

THIS CONVERSION AGREEMENT (this “Agreement”), is made as of December 29, 2015
(“Effective Date”), by and among GPB Life Science Holdings LLC (the “Lender”),
and InterCloud Systems, Inc., a Delaware corporation (together with all of its
successors and current and future direct and/or indirect Subsidiaries,
collectively, the “Borrower,” and, collectively with the Lender, the “Parties”).

 

W I T N E S S E T H:

 

WHEREAS, pursuant to the Bridge Financing Agreement, made effective as of
December 3, 2014 by and between the Borrower and the Lender (the “BFA”), the
Borrower sold to the Lender a (i) 12% Senior Secured Note of the Borrower in the
aggregate principal amount of $2,500,000 (Note No.:GPB-1), Issue Date: December
3, 2014 (“Note 1”), and (ii) four (4) year common stock purchase warrant of the
Borrower (Warrant No.:GPB-1), Original Issue Date: December 3, 2014, to purchase
250,000 Warrant Shares (“Warrant No. 1”);

 

WHEREAS, pursuant to the Agreement to Purchase the $1,500,000 Additional Note,
dated December 24, 2014, by and between the Borrower and the Lender (the
“12/24/2014 Agreement”), the Borrower sold to the Lender pursuant to Section
2.13 of the BFA a (i) 12% Senior Secured Note of the Borrower in the aggregate
principal amount of $1,500,000 (Note No.:GPB-2), Issue Date: December 24, 2014
(“Note 2,” and together with Note 1, collectively, the “2 Original Notes”), and
(ii) four (4) year common stock purchase warrant (Warrant No.:GPB-2), Original
Issue Date December 24, 2014, to purchase 150,000 Warrant Shares (“Warrant No.
2,” and, collectively with Warrant No. 1, the “2 Original Warrants”);

 

WHEREAS, pursuant to a Securities Purchase Agreement, dated as of May 15, 2015
between the Parties (the “SPA”) and Amendment No. 1 to the Bridge Financing
Agreement, made as of May 14, 2015, by and among the Parties (“Amendment No.
1”), the Borrower, among other items (i) sold to the Lender a 12% senior secured
convertible note of the Borrower (Note No.: GPB-3), Issue Date: May 14, 2015, in
the aggregate principal amount of $2,000,000 (the “$2,000,000 Note”), and (ii) 
amended and restated the 2 Original Notes by issuing to the Lender (a) Amended
and Restated 12% Senior Secured Convertible Note No. 1 in the aggregated
principal amount of $2,500,000 (which continued to be identified as Note No.:
GPB-1), Original Issue Date: December 3, 2015 (“A/R Note 1”), in exchange for
and to amend and restate Note 1; and (b) Amended and Restated 12% Senior Secured
Convertible Note No. 2 in the aggregate principal amount of $1,500,000 (which
continued to be identified as Note No.: GPB-2, Original Issue Date: December 24,
2015 (“A/R Note 2”), and together with A/R Note 1, collectively, the “2 A/R
Notes”), in exchange for and to amend and restate Note 2, which 2 Amended and
Restated Notes together with the $2,000,000 Note shall collectively be referred
to as the “3 Notes”);

 

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WHEREAS, pursuant to the SPA and Amendment No. 1, the Borrower (i) amended and
restated the 2 Original Warrants by issuing to the Lender a (a) four (4) year
Amended and Restated Warrant No. 1 of the Borrower (which continued to be
identified as Warrant No. GPB-1); Original Issue Date: December 3, 2015, to
purchase 250,000 Warrant Shares (“A/R Warrant 1”); and (b) four (4) year Amended
and Restated Warrant No. 2 of the Borrower (which continued to be identified as
Warrant No. GPB-2); Original Issue Date: December 24, 2014, to purchase 150,000
Warrant Shares (“A/R Warrant 2”, and together with A/R Warrant 1, collectively,
the “2 A/R Warrants”); (ii) issued to the Lender a (a) four (4) year Additional
Warrant of the Borrower (Warrant No. GPB-3); Original Issue Date: May 14, 2015,
to purchase 200,000 Warrant Shares of the Borrower (the “Additional Warrant”),
and (b) four (4) year Restructuring Warrant of the Borrower (Warrant No.:
GPB-4); Original Issue Date: May 14, 2015; to purchase 50,000 Warrant Shares
(the “Restructuring Warrant,” and together with the 2 A/R Warrants and the
Additional Warrant, collectively, the “4 Warrants”);

  

WHEREAS, pursuant to Amendment No. 2 to the Bridge Financing Agreement and
Agreement to Reduce Conversion Price of Certain Secured Convertible Promissory
Notes and Cancellation of Certain Warrants, made as of August 12, 2015 by and
among the Lender and the Borrower (“Amendment No. 2”), pursuant to which, among
other items (i) the 2 A/R Notes were further amended and restated and the
$2,000,000 Note was amended and restated to, among other items, reduce the
Conversion Price of the 3 Notes from $3.75 per share to $2.00 per share, by the
Borrower issuing to the Lender a (x) 12% New 2nd Amended and Restated Senior
Secured Convertible Promissory Note No. 1 in the aggregate principal amount of
$2,500,000 (“New A/R Note 1 ”), which New A/R Note 1 was issued by the Borrower
to the Lender in exchange for and to amend and restate A/R Note 1; (y) 12% New
2nd Amended and Restated Senior Secured Convertible Promissory Note No. 2 in the
aggregate principal amount of $1,500,000 (“New A/R Note 2”, and collectively
with New A/R Note 1, the “2 New Amended and Restated Notes”), which New A/R Note
2 was issued by the Borrower to the Lender in exchange for and to amend and
restate A/R Note 2, and (z) 12% Amended and Restated Senior Secured Convertible
Promissory Note No. 3 in the aggregate principal amount of $2,000,000 (“A/R
$2,000,000 Note” and together with the 2 New Amended and Restated Notes,
collectively, the “3 Notes”), which A/R $2,000,000 Note was issued by the
Borrower to the Lender in exchange for and to amend and restate the $2,000,000
Note; (ii) the Restructuring Warrant was cancelled (which as a result the only
warrants issued to the Lender by the Borrower under the Loan Agreement and
currently issued and outstanding as of the date hereof are the 2 A/R Warrants
and the Additional Warrant, which 3 such outstanding warrants shall collectively
be referred to as the “3 Current Warrants”) and (iii) the Loan Agreement was
amended by amending Section 9 of Amendment No. 1 to change certain provisions of
the Amortization Payments;

 

WHEREAS, the BFA, the 12/24/2014 Agreement, the SPA, Amendment No. 1, Amendment
No. 2, this Agreement and together with all amendments, supplements, exhibits,
schedules and annexes to each of such agreements, shall collectively be referred
to as the “Loan Agreement.”

 

WHEREAS, Borrower is entering into a new financing as of the date hereof, the
cash proceeds of which will be used, among other things, to reduce (the
“Repayment”) the total aggregate principal amount owed to Lender to $1,500,000
under the 3 Existing Notes (the “Remaining Principal Balance”);

 

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WHEREAS, pursuant to this Agreement, the Parties have agreed to, among the other
items set forth in this Agreement (i) effectuate the Repayment, (ii) convert (x)
the Remaining Principal Balance, and (y) All Other Amounts Due (as defined
below) due from the Borrower to the Lender under the Loan Agreement and other
Documents, including, but not limited to all accrued but unpaid Cash Interest
and Additional Interest and $25,000 representing 2% of the $1,500,000 aggregate
principal amount payable as a result of conversion of Note 2, all as provided in
the Documents (but excluding, all of Lenders Legal Fees (as defined below),
collectively, the “Other Amounts Due”, and together with the Remaining Principal
Amount, collectively, the “Remaining Balance”), into shares of Common Stock and
(iii) reduce the exercise price of the 3 Current Warrants to $1.75 (the “New
Exercise Price”), on the terms and conditions set forth herein; and

 

WHEREAS, capitalized terms used but not otherwise defined herein shall have the
meanings in the Loan Agreement.

 

NOW, THEREFORE, in consideration of the foregoing premises and for valuable
consideration, the sufficiency and receipt of which are hereby acknowledged, the
Parties, intending to be legally bound hereby agree as follows:

 

AGREEMENT

 

1)The Transactions. Upon the execution of this Agreement (the “Closing Date”) by
the Parties hereto, the following transactions shall be deemed to occur
simultaneously and shall be referred to as the “Closing”:

(a)Conversion of Remaining Balance. The Parties hereby agree that the Remaining
Balance will be converted as of the date hereof into shares of Common Stock at a
conversion price per share equal to seventy-five (75%) percent, multiplied by
the lower of (x) the average VWAP of a share of Common Stock on the principal
Trading Market for the five consecutive Trading Day period ending with the
Trading Day immediately prior to the Closing Date and (y) the one (1) day VWAP
for a share of Common Stock on the principal Trading Market on the Closing Date.

(b)Weekly Sales. Lender hereby covenants and agrees that for the ninety (90) day
period following the date hereof (the “90 Day Period”), Lender will sell no more
than $200,000 worth (the “Weekly Maximum”) of Common Stock during any calendar
week, which Weekly Maximum will be increased, from time to time, upon a
substantive change in the trading volume and/or price of a share of Common
Stock.; provided, however, notwithstanding anything to the contrary provided
herein or elsewhere, in the event the Lender does not for any reason sell any
Conversion Shares during the 90 Day Period, following such 90 Day Period there
shall be no limitations on weekly sales of Conversion Shares.

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(c)True-Up. If upon the earliest to occur of (i) the last Trading Day following
the 90 Day Period, and (ii) the Trading Day that all Remaining Conversion Shares
are sold, the gross proceeds received by the Borrower therefrom are less than in
the aggregate $1,875,000 (the dollar amount of $1,875,000 less the gross
proceeds received by the Lender from the sale of the Remaining Shares shall be
referred to as the “Shortfall Amount”), then the Lender shall send to the
Borrower in writing its calculation of the Shortfall and proof of the gross
proceeds received by it from the sale of the Remaining Conversion Shares
(brokerage, statements and/or similar evidence shall be sufficient proof
thereof, such Shortfall Calculations plus the proof of the gross proceeds
received from the sale of the Remaining Conversion Shares shall hereinafter be
referred to as the “Shortfall Package”), and absent manifest error by the
Lender, provided in detail in writing from the Borrower to the Lender no later
than the 2nd Trading Day following the 3rd Business Day after the Borrower
receives or is deemed to receive the Shortfall Package shall be binding on the
Parties. Thereafter, on the 2nd Trading Day following the date the Borrower
receives or is deemed to receive the Shortfall Package (the “True-Up Date”); the
Borrower shall at its option either (i) pay in cash to the Lender the Shortfall
Amount by wire transfer of immediately available funds pursuant to wiring
instructions provided to the Lender, or (ii) deliver to the Lender such number
of additional shares of Common Stock (the “True-Up Shares”), without restrictive
legend, or if because the Borrower was ever a “Shell Company” (as defined under
Rule 144), True-Up Shares with a standard Securities Act legend and its counsel
issues to the Borrowers transfer agent a legal opinion (or opinions when
requested at any time and from time to time by the Lender to remove the
restrictive legends upon a sale of any True-Up Shares) in an amount equal to the
Shortfall Amount divided by the closing sales price of a share of Common Stock
on the Trading Day immediately following the True-Up Date; and the Borrower
shall have the right to sell the True-Up Shares without limitation provided,
however, if the Borrower elects to provide to the Lender True-Up Shares on the
True-Up Date, and following the sale of all True-Up Shares by the Lender, the
aggregate amount of gross proceeds received by the Lender from the sale of the
Remaining Conversion Shares and the True-Up Shares is less than $1,875,000 (the
“2nd Shortfall Amount”), as evidenced by proof in form so provided elsewhere in
this Section 1(c), then the Borrower shall no later than the third (3rd) Trading
Day following the date the Borrower receives such calculation and proof of the
2nd Shortfall Amount (the “2nd True-Up Date”) at the Borrower’s option either
(i) pay in cash to the Lender the 2nd Shortfall Amount by wire transfer of
immediately available funds pursuant to wiring instructions provided to the
Lender, or (ii) deliver to the Lender such number True-Up Shares, without
restrictive legend, or if because the Borrower was ever a “Shell Company” (as
defined under Rule 144), True-Up Shares with a standard Securities Act legend
and its counsel issues to the Borrower’s transfer agent a legal opinion (or
opinions when requested at any time and from time to time by the Lender to
remove the restrictive legends upon a sale of any True-Up Shares) in an amount
equal to the 2nd Shortfall Amount divided by the closing sales price of a share
of Common Stock on the Trading Day immediately following the 2nd True-Up Date;
and the Borrower shall have the right to sell the True-Up Shares without
limitation. Absent manifest error by the Lender, the Lenders calculation of the
2nd Shortfall Amount shall be binding on the Parties. The Borrower agrees to
take any and all action reasonably requested by the Borrower, in the time frame
reasonably requested by the Lender (if no time frame is provided herein and/or
in the other Documents), to facilitate the provisions of this Section 1(c).

(d)New Amended and Restated Warrants. Issue to the Lender (i) further amended
and restated warrants having the same terms and conditions of the A/R Warrants;
and (ii) an amended and restated warrant having the same terms as the Additional
Warrant, except that the exercise price of such warrants shall be reduced to the
New Exercise Price (collectively, the “New 3 A/R Warrants”).

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(e)Lender’s Legal Fees. As a condition to the Closing, the Borrower shall pay to
Gusrae Kaplan Nusbaum PLLC, GPB’s legal counsel: $25,000, representing full of
all fees and expenses incurred by the Lender for legal services performed by
such legal counsel for GPB relating to ICLD following September 8, 2015, which
legal fees and expenses are required to be paid by ICLD pursuant to Section 9.4
of the Bridge Financing Agreement dated as of December 3, 2014, as amended by
and between GPB and ICLD (“Lender’s Legal Fees”).

2)Representations and Warranties of the Borrower.

(a)This Agreement and all transactions contemplated herein and therein have been
duly and validly executed by the Borrower; the Borrower is authorized and has
the power to enter into this Agreement and perform all of the transactions set
forth herein and therein, and this Agreement shall constitute a valid binding
obligation and agreement of the Borrower, enforceable against Borrower in
accordance with its terms.

(b)All necessary action has been taken by the Borrower including, but not
limited to, by its Board of Directors and stockholders, if necessary, to
authorize and effectuate all transactions set forth in this Agreement.

(c)No consents, approvals, permits and/or authorizations is required by any
governmental and/or regulatory body including, but not limited to, FINRA, the
SEC and/or Nasdaq not already obtained by the Borrower to effectuate the
transactions set forth in this Agreement and neither the execution, delivery of
and the performance of the Borrower of the transactions contemplated by this
Agreement nor the effectuation of the transactions disclosed herein or therein
will result in (or with the passage of time and/or the giving of notice could
result in), an Event of Default, a default, breach, violation and/or an event of
default of (i) any loan, instrument and/or other agreement that the Borrower
and/or its Subsidiaries are a party to and/or any of their respective assets
and/or properties are bound by or subject to, (ii) the bylaws or other charter
documents of the Borrower and/or its Subsidiaries and/or (iii) result in the
violation of any law; rule and/or regulation of any federal, state and/or
regulatory body including, but not limited to, the SEC, FINRA and/or Nasdaq.

(d)The issuance of the Conversion Shares (and the True-Up Shares, if any),
issuable upon conversion of the Remaining Balance are exempt from the
registration requirements of the Securities Act of 1933, as amended (the
“Securities Act”) pursuant to Rule 506 of Regulation D and/or Section 4(2)
thereof; and the issuance of the Conversion Shares (and the True-Up Shares, if
any), when issued upon conversion of the Remaining Balance will vest in the
Lender sole and exclusive title to such securities free from all Liens,
encumbrances and/or other clouds on title and such securities will be fully
paid, validly issued and non-assessable and not subject to any pre-emptive
rights, rights of first refusal, or other similar rights; and such Conversion
Shares (and the True-Up Shares, if any), so issued shall all be immediately
eligible for sale pursuant to Rule 144 of the Securities Act (“Rule 144”) as the
date of issuance such Conversion Shares (and the True-Up Shares, if any), tack
back to the date the 3 Notes were purchased by the Lender from the Borrower
Remaining Principal Amount of the 3 Notes was used to purchase one or more of
the 3 Current Notes, each of which 3 Current Notes were purchased by the Lender
from the Borrower more than 6 months prior to the date hereof.

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(e)  The execution, delivery and performance of this Agreement and the
transactions contemplated hereby by the Borrower, (i) are within Borrower’s
corporate powers, (ii) have been duly authorized by all necessary action by or
on behalf of Borrower (and/or its shareholders to the extent required by law),
(iii) have received all necessary and/or required governmental, regulatory and
other approvals and consents (if any shall be required) on behalf of Borrower,
(iv) do not and shall not contravene or conflict with any provision of, or
require any consents under (a) any law, rule, regulation or ordinance, (b)
Borrower’s organizational documents; and/or (c) any agreement binding upon
Borrower or any of Borrower’s properties except as would not reasonably be
expected to have a Material Adverse Effect, and (v) do not and will not result
in, or require, the creation or imposition of any Lien and/or encumbrance on any
of Borrower’s properties or assets pursuant to any law, rule, regulation or
ordinance or otherwise.

 

(f)    As of the date hereof, no Event of Default, event of default and/or
default has occurred (and/or with the passage of time could occur) under any of
the Documents, including, but not limited to, the Loan Agreement, the 3 Current
Notes, the 3 Current Warrants, the Security Agreement and/or any other
agreement, instrument and/or documents to which the Borrower is a party to or
pursuant to which any of its properties and/or assets are subject to; and taking
into account, and assuming the occurrence of all of the transactions
contemplated by and related to this Agreement, no Event of Default, event of
default and/or default has or shall occur (or with the passage of time could
occur) under any of the Documents including, but not limited to, the Loan
Agreement, the 3 Existing Notes, the 3 Existing Warrants, the Security Document
and/or any other agreement, instrument and/or documents to which the Borrower is
a party to or pursuant to which any of its properties and/or assets are subject
to.

 

(g)As of the date hereof, the dollar amount (i) being paid by the Borrower to
the Lender to reduce the aggregate principal amount of the 3 Notes to $1,500,000
is as set forth in or attached to the Pay-Off Letter dated the date hereof and
annexed hereto as Exhibit 1, and (ii) the Remaining Balance being converted into
Common Stock pursuant hereto is $1,500,000.

 

(h)  The entry into this Agreement by the Borrower and the performance of its
obligations hereunder, including, but not limited to, the payment in cash of all
funds required to pay all amounts due to the Lender pursuant to (i) the Pay-Off
Letter, and (ii) Section 16 of this Agreement shall not directly and/or
indirectly be prohibited and/or cause any breach, default, event of default, or
with the passage of time and/or giving notice by the Borrower result in an event
of default under and/or pursuant to any agreement, document and/or understanding
(whether in writing or orally) with the entities who are providing and/or making
available loans and/or other funds to the Borrower.

 

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3)Representations and Warranties of Lender.

(a)The Lender has all limited liability company power to enter into this
Agreement and effectuate all of the transactions set forth herein, and when
entered into by the Lender this Agreement will constitute a binding and
enforceable agreement in accordance with its terms against the Lender.

(b)All action has been taken by the Lender including, but not limited to, its
Board of Directors and stockholders to effectuate and authorize all transactions
set forth in this Agreement.

(c)Lender is an “accredited investor” as such term is defined under the
Securities Act.

4)Cost and Expenses. Other than as provided in Section 1(e) hereof, the Parties
hereto shall be responsible for their own fees and expenses in connection with
the preparation, negotiation and entering into of this Agreement and the
transactions contemplated hereby. 5)Conditions to Closing.

a.Delivery of Documents to Lender. Notwithstanding anything provided in this
Agreement, the Lender’s obligation to effectuate its obligations hereunder
including, but not limited to, the Closing shall be subject to Lender receiving
from the Borrower at or before the Closing, each of the following original
properly executed and dated documents, in form and substance reasonably
satisfactory to the Lender and its counsel, and where applicable, duly executed
and recorded:

i.The Conversion Shares issuable upon conversion of the Remaining Balance;    
ii.This Agreement;     iii.The 3 New A/R Warrants (with New Exercise Price); and
    iv.The executed Pay-Off Letter.    

b.Delivery of Documents to the Borrower. Notwithstanding anything provided in
this Agreement, the Borrower’s obligations hereunder including, but not limited
to, to effectuate the Closing shall be subject to the Borrower receiving from
the Lender on or before the Closing, this Agreement.

6)Severability. Any provision of this Agreement held to be invalid, illegal or
unenforceable by a court of competent jurisdiction, in any jurisdiction, shall,
as to such jurisdiction, be ineffective to the extent of such invalidity,
illegality or unenforceability without affecting the validity, legality and
enforceability of the remaining provisions hereof; and the invalidity of a
particular provision in a particular jurisdiction shall not invalidate such
provision in any other jurisdiction.

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7)Authority. Each of the undersigned expressly represents and warrants that (i)
he, she or it has the authority to execute this Agreement on behalf of the party
or parties to be bound by his, her or its signature, (ii) the execution,
delivery and performance of this Agreement has been duly authorized by all
necessary action and (iii) this Agreement is a legal, valid and binding
obligation enforceable in accordance with its terms.     8)Entire Agreement.
This Agreement constitutes the whole and entire agreement between the parties
with respect to the subject matter expressly contemplated hereby and all prior
or contemporaneous agreements, understandings, representations and statements,
oral or written, related to the subject matter expressly contemplated in such
documents and instruments are merged herein.     9)Construction. The parties
have participated jointly in the negotiation and drafting of this Agreement. In
the event an ambiguity or question of intent or interpretation arises, no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any provisions hereof.     10)Counterparts. This
Agreement may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which shall be deemed to be an
original, but all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of this Agreement by facsimile or
electronic mail shall be equally as effective as delivery of an original
executed counterpart of this Agreement.     11)Headings. Section headings herein
are included for convenience of reference only and do not constitute a part of
this Agreement for any other purpose.     12)Governing Law. This Agreement and
the terms and conditions set forth herein, shall be governed by and construed
solely and exclusively in accordance with the internal laws of the State of New
York without regard to the conflicts of laws principles thereof. The parties
hereto hereby expressly and irrevocably agree that any suit or proceeding
arising directly and/or indirectly pursuant to or under this Agreement shall be
brought solely in a federal or state court located in the City, County and State
of New York. By its execution hereof, the parties hereto covenant and
irrevocably submit to the in personam jurisdiction of the federal and state
courts located in the City, County and State of New York and agree that any
process in any such action may be served upon any of them personally, or by
certified mail or registered mail upon them or their agent, return receipt
requested, with the same full force and effect as if personally served upon them
in New York, New York. The parties hereto expressly and irrevocably waive any
claim that any such jurisdiction is not a convenient forum for any such suit or
proceeding and any defense or lack of in personam jurisdiction with respect
thereto. In the event of any such action or proceeding, the party prevailing
therein shall be entitled to payment from the other parties hereto of all of its
reasonable counsel fees and disbursements.     13)Survival of Documents.
Notwithstanding anything to the contrary provided herein or elsewhere, all
Obligations except as expressly provided herein to the contrary, of the Borrower
to the Lender under the Documents including, but not limited to, the Loan
Agreement, shall survive the execution and performance of this Agreement and the
transaction contemplated herein including, but not limited to, all
indemnification and contribution obligations provisions.

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14)Interest in Certain Circumstances. Notwithstanding anything to the contrary
provided herein or elsewhere, in the event of any failure of the Borrower to
make any payment in the time and in the form so provided in this Agreement (each
a “Late Payment”), all amounts due but not paid when and in the form so required
in this Agreement shall bear interest at the rate of sixteen (16%) percent per
annum based on a year having 12 months with each month having 30 days (or each
year having 360 days). Such interest shall commence to accrue on the date when
any such payment is due and not received by the Lender in the amount and in the
form so required by this Agreement and shall continue accruing through and
including the date such Late Payment is received in full by the Lender
including, but not limited to, all accrued but unpaid interest thereon as
provided in this Section 14. The Lender shall not be required to provide any
notice of any Default to the Borrower or otherwise; and all interest payments
due hereunder shall be payable in immediately available funds by wire transfer
to the Lender pursuant to wiring instructions provided to the Borrower and shall
be payable no later than 2 Business Days from a written demand by the Lender.

15)Definitions. Defined terms not otherwise defined herein and/or in the
Documents shall have the meaning set forth in this Section 15.

(i)“Bloomberg” means Bloomberg, L.P.     (ii)“Trading Day” means a day on which
the principal Trading Market for the Common Stock is open for trading.    
(iii)“Trading Market” means any of the following markets or exchanges on which
the Common Stock (or any other common stock of any other Person that references
the Trading Market for its common stock) is listed or quoted for trading on the
date in question: the OTC Bulletin Board, The NASDAQ Global Market, The NASDAQ
Global Select Market, The NASDAQ Capital Market, the New York Stock Exchange,
NYSE Arca, the NYSE MKT, or the OTCQX Marketplace, the OTCQB Marketplace, the
OTCPink Marketplace or any other tier operated by OTC Markets Group Inc. (or any
successor to any of the foregoing).     (iv)“VWAP” means, for or as of any
Trading Day, the dollar volume-weighted average price for such security on the
Trading Market (or, if the Trading Market is not the principal trading market
for such security, then on the principal securities exchange or securities
market on which such security is then traded) during the period beginning at
9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New York time, as
reported by Bloomberg through its “HP” function (set to weighted average) or
FactSet (or similar) or, if the foregoing does not apply, the dollar
volume-weighted average price of such security in the over-the-counter market on
the electronic bulletin board for such security during the period beginning at
9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New York time, as
reported by Bloomberg or FactSet (or similar) or, if no dollar volume-weighted
average price is reported for such security by Bloomberg (or FactSet) for such
hours, the average of the highest closing bid price and the lowest closing ask
price of any of the market makers for such security as reported in the “pink
sheets” by OTC Markets Group Inc. (formerly Pink Sheets LLC).  If the VWAP
cannot be calculated for such security on such date on any of the foregoing
bases, the VWAP of such security on such date shall be the fair market value as
mutually determined by Lender. All such determinations shall be appropriately
adjusted for any stock dividend, stock split, stock combination,
recapitalization or other similar transaction during such period.

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16)Buy-In Payments and Actions. If the Borrower shall fail on or prior to the
Share Delivery Date (as defined below) to issue and deliver a certificate
(without any restrictive legend if no such legend is required by law), to the
Borrower, its brokerage firm, if requested, or credit to the Borrower’s balance
account with DTC, the number of shares of Common Stock to which the Lender is
entitled pursuant to a written request by the Lender to the Borrower (the
“Notice”), and if after the Share Delivery Date the Lender purchases or has
purchased for it by its brokerage firm or otherwise (in an open market
transaction or otherwise) Common Stock to deliver in satisfaction of a sale by
the Lender of Conversion Shares (a “Buy-In”), then the Borrower shall, in the
Lender’s discretion, either (i) pay cash to the Lender in an amount equal to the
Lender’s total purchase price (including brokerage commissions and other
out-of-pocket expenses, if any) for the shares of Common Stock so purchased (the
“Buy-In Price”), at which point the Borrower’s obligation to issue and deliver
such certificate, without legend or credit the Lender’s balance account with
DTC, for the shares of Common Stock to which the Lender requests to be delivered
in the Notice shall terminate, or (ii) promptly honor its obligation to deliver
to the Lender a certificate or certificates (without restrictive legend, if no
such legend is required by law), representing such number of shares of Common
Stock, or credit the Lender’s balance account with DTC, for such number of
shares of Common Stock to which the Lender is entitled upon and pay cash to the
Lender in an amount equal to the excess (if any) of the Buy-In Price over the
product of (i) such number of shares of Common Stock, times (ii) the closing
sale price (or equivalent) on the principal Trading Market of the Common Stock
on the Share Delivery Date.  All payments for a Buy-In shall be payable upon
demand by the Lender which shall be made at any time and from time to time, and
shall be paid in immediately available cash funds by wire transfer to the Lender
by the Borrower pursuant to wiring instructions provided to the Lender by the
Buyer. For purposes hereof “Share Delivery Date” means the 3rd Business Day
following the date the Lender submits a request to sell Conversion Shares
pursuant to Rule 144 to the Borrower.

17)Release of Lender. For due and adequate consideration, the receipt and
sufficiency of which is hereby acknowledged the Borrower and each of its
Subsidiaries, affiliates, officers, members, managers, attorneys, agents and any
of their present or former directors, officers, employees or shareholders and
employees, and their respective successors, heirs, and assigns (each a
“Releasor,” and collectively the “Releasors”) pursuant and as a condition to
entering into this Agreement each for themselves and for each of their
respective present and/or previous affiliates, heirs, executors, administrators,
successors, predecessors, members, advisors, equity and/or debtholders,
directors, officers, employees, affiliates and/or related parties expressly and
irrevocably, jointly and severally release and discharge (to the fullest extent
permitted by applicable law) the Lender and all of Lender’s Subsidiaries,
affiliates, members, managers, partners, attorneys, agents, insurers, employees,
representatives, transferees, assigns, heirs, executors, and administrators
(each a “Released Party,” and collectively, the “Released Parties”) from any and
all liability, claims, demands, liens, actions or causes of action of every kind
and nature, suits, debts, dues, attorneys’ fees and expenses, sums of money,
damages, or judgments whatsoever, in law or equity, whether direct or indirect,
derivative, by way of subrogation or otherwise, which Releasor, Releasors’
heirs, executors, administrators, successors and assigns may now have, hereafter
have or claim to have, known or unknown, for, upon, or by reason of any matter,
cause or thing whatsoever, from the beginning of time to the day and the date of
this Agreement. Releasors each hereby expressly and irrevocably, jointly and
severally waives any and all provisions and any other similar applicable statute
or rule of law that restricts whatsoever the release of claims that may arise or
first become known in the future, even if such claims if known would materially
affect either of the Releasors decision to execute this release, and regardless
of whether each Releasor lack of knowledge arises from ignorance, oversight,
error, negligence or otherwise. Releasors each jointly and severally hereby
agree, represent and warrant to each Released Party that each Releasor realizes
and acknowledges that factual matters now unknown to Releasors may have given or
may hereafter give rise to causes of action, claims, suits, demands, debts,
controversies, damages, costs, losses and expenses which are presently unknown,
unanticipated and unsuspected, and each Releasor further agrees, represents and
warrants that the release provided hereunder has been negotiated and agreed upon
in light of such realization and that Releasors nevertheless intends to release,
discharge and acquit the Released Parties from any such unknown claims. Each
Releasor represents, warrants and agrees that in executing and entering into
this release each Releasor is not relying and has not relied upon any
representations, promises or statements made by anyone that are not recited,
contained or embodied herein.

 

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[Signature Page]

 

IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed
and delivered as of the Effective Date.

 

BORROWER: INTERCLOUD SYSTEMS, INC.         By: /s/ Daniel Sullivan   Name:
Daniel Sullivan   Title: Chief Accounting Officer       LENDER: GPB LIFE SCIENCE
HOLDINGS LLC         By: /s/ Tim Creutz   Name: Tim Creutz   Title: Vice
President

  

[Remainder of Page Intentionally Left Blank]

 

 11 

 

 

Exhibit 1

 

Pay-Off Letter

 

 

12