EXHIBIT 10.6

PLEDGE AGREEMENT

THIS PLEDGE AGREEMENT (this “Agreement”), dated as of November 3, 2010, is made
by PHOENIX FOOTWEAR GROUP, INC., a Delaware corporation (“Pledgor”), in favor of
GIBRALTAR BUSINESS CAPITAL, LLC, a Delaware corporation (together with its
successors and assigns, the “Pledgee”).

RECITALS:

A. Pledgor is the shareholder of each entity listed on Annex A attached hereto
and made a part hereof (collectively, the “Issuer”).

B. Pledgor and certain of its subsidiaries (each a “Borrower” and collectively,
the “Borrowers”) is a party with the Pledgee and the Lenders (as defined
therein), to that certain Loan and Security Agreement of even date herewith (as
the same may be amended, supplemented or modified from time to time, the “Loan
Agreement”), pursuant to which the Pledgor has requested that the Pledgee make
certain loans to the Borrower; capitalized terms used but not defined herein
shall have the meanings ascribed thereto in the Loan Agreement.

C. It is a condition precedent to the making of the loans under and pursuant to
the Loan Agreement that the Pledgor execute and deliver this Agreement and shall
have made the pledge contemplated hereunder in favor of the Pledgee for the
benefit of the Pledgee and the Lenders.

NOW, THEREFORE, in consideration of the premises hereinabove, and to induce the
Pledgee to make the loans identified hereinabove pursuant to the Loan Agreement
and in consideration of the benefits accruing to the Pledgor, and for other good
and valuable consideration, the receipt, adequacy and sufficiency of which are
hereby acknowledged, the Pledgor hereby covenants and agrees with the Pledgee
for the benefit of the Pledgee and the Lenders as follows:

1. INCORPORATION OF LOAN AGREEMENT; SECURITY FOR LIABILITIES. The Loan Agreement
and the terms and provisions thereof are hereby incorporated herein in their
entirety by this reference thereto. All terms capitalized but not otherwise
defined herein shall have the same meanings herein as in the Loan Agreement.
This Agreement is for the benefit of the Pledgee and the Lenders to secure the
prompt and complete payment and performance when due of all indebtedness,
liabilities, obligations (including the Liabilities), or undertakings owing by
the Borrowers to the Pledgee or any Lender, of any kind or description arising
out of or outstanding under, advanced or issued pursuant to, or evidenced by the
Loan Agreement, this Agreement, or any of the other Financing Agreements,
irrespective of whether for the payment of money, whether direct or indirect,
absolute or contingent, due or to become due, voluntary or involuntary, whether
now existing or hereafter arising, and including all interest, costs,
indemnities, fees (including attorneys’ fees) and expenses (including interest,
costs, indemnities, fees and expenses that, but for the provisions of the
Bankruptcy Code, would have accrued

 

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irrespective of whether a claim therefore is allowed) and any and all other
amounts which any Borrower is required to pay pursuant to any of the foregoing,
by law, or otherwise owing by a Borrower to the Pledgee and/or the Lenders,
including, without limitation, the “Liabilities,” as defined in the Loan
Agreement (collectively, the “Liabilities”) (all of the foregoing being herein
collectively called the “Secured Liabilities”).

2. DEFINITION OF PLEDGED COLLATERAL. As used herein, the term “Pledged
Collateral” shall mean the securities and investment property described on Annex
A attached hereto and made a part hereof, and any additional Pledged Collateral
acquired pursuant to Section 3.2 below which Annex A may be supplemented from
time to time pursuant to Section 3.2 below. The Pledgor represents and warrants
to the Pledgee for the benefit of the Pledgee and the Lenders that on the date
hereof (a) Annex A attached hereto correctly identifies the Pledged Collateral
owned by Pledgor with respect to each of the Issuer; and (b) the Pledgor is the
holder of record and sole beneficial and legal owner of such Pledged Collateral.

3. PLEDGE OF PLEDGED COLLATERAL AND OTHER COLLATERAL.

3.1 Pledge. To secure the Secured Liabilities and for the purposes set forth in
Section 1 hereof, Pledgor hereby pledges, collaterally assigns and conveys, and
grants a security interest in and lien on, in favor of Pledgee for the benefit
of the Pledgee and the Lenders, all of Pledgor’s right, title and interest in,
to, and under (A) the Pledged Collateral, (B) any additional Pledged Collateral
acquired pursuant to Section 3.2 below (whether by purchase, dividend, merger,
consolidation, sale of assets, split, spin-off, or any other dividend or
distribution of any kind or otherwise), (C) all distributions, dividends, cash,
certificates, liquidation rights and interests, options, rights, warrants,
instruments or other property from time to time received, receivable or
otherwise distributed in respect of or in exchange or substitution for any and
all of the Pledged Collateral, (D) the Pledgor’s right to vote the Pledged
Collateral, and (E) all proceeds, products, replacements and substitutions for
any of the foregoing, in each case whether now owned or hereafter acquired by
the Pledgor (collectively, the “Collateral”). If the Pledged Collateral is
evidenced by certificates, then the Pledgor shall concurrently herewith deposit
with the Pledgee, the Pledged Collateral owned by the Pledgor on the date hereof
and the certificates representing the Pledge Collateral accompanied by “stock
powers” or an Assignment Separate From Certificate duly executed in blank by the
Pledgor. Whether or not the Pledged Collateral is evidenced by certificates, the
Pledgor hereby permits the Pledgee to file a UCC Financing Statement naming the
Pledgor as debtor and the Pledgee as secured party with respect to the Pledged
Collateral with the Delaware Secretary of State, in form and substance
satisfactory to the Pledgee in its sole and absolute determination, and without
the requirement of the Pledgor’s signature. Notwithstanding anything to the
contrary contained in this Agreement, the Pledgee shall not as a result of this
Agreement be responsible or liable for any Liabilities or liabilities of the
Pledgor in the Pledgor’s capacity as a shareholder, if any, and the Pledgee
shall not be deemed to have assumed any of such Liabilities or liabilities.

3.2 Subsequently Acquired Pledged Collateral. If at any time or from time to
time after the date hereof during the term of this Agreement, the Pledgor shall
acquire any additional Pledged Collateral, including any further stock or equity
in each of the Issuer (whether by purchase, dividend, merger, consolidation,
sale of assets, split, spin-off, or any other dividend or distribution of any
kind or otherwise), then the Pledgor will forthwith pledge and, if applicable,

 

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deposit such additional Pledged Collateral with the Pledgee and deliver to the
Pledgee certificates or instruments therefor, endorsed in blank by the Pledgor
or accompanied by “stock powers” or an Assignment Separate From Certificate duly
executed in blank by the Pledgor, and will promptly thereafter deliver to the
Pledgee a certificate (which shall be deemed to supplement Annex A attached
hereto) executed by the Pledgor describing such Pledged Collateral and the other
Pledged Collateral pledged to the Pledgee, and certifying that the same have
been duly pledged with the Pledgee hereunder. Whether or not such additional
Pledged Collateral is evidenced by certificates, the Pledgor shall permit the
Pledgee to file a UCC Financing Statement naming the Pledgor as debtor and the
Pledgee as secured party with respect to the additional Collateral with the
Delaware Secretary of State, in form and substance satisfactory to the Pledgee
in its sole and absolute determination, and without the requirement of the
Pledgor’s signature.

3.3 Uncertificated Pledged Collateral. In addition to anything contained in
Sections 3.1 and 3.2 hereof, if any Pledged Collateral (whether now owned or
hereafter acquired) is not certificated or becomes an uncertificated security,
the Pledgor shall promptly notify the Pledgee thereof and shall promptly take
all actions required to perfect the security interest and pledge in favor of the
Pledgee under applicable law (including, in any event, any action required or
appropriate under this Agreement or the Uniform Commercial Code of the State of
Illinois or equivalent provisions of any other applicable jurisdiction (the
“UCC”)). The Pledgor further agrees to take such actions as the Pledgee deems
necessary or desirable to effectuate the foregoing and to permit the Pledgee to
exercise any of its rights and remedies hereunder.

4. VOTING, ETC. Unless and until an Event of Default (as defined in the Loan
Agreement) occurs and is continuing, the Pledgor shall be entitled to vote any
and all of the Pledged Collateral; provided, however, that no vote shall be cast
or any action taken by Pledgor which would violate or be inconsistent with any
of the terms of this Agreement, the Loan Agreement, any other Financing
Agreement or any other instrument or agreement relating to the Secured
Liabilities, or which would have the effect of impairing the position or
interests of the Pledgee or which would authorize or effect actions prohibited
under the terms of the Loan Agreement or any Financing Agreement. All such
rights of the Pledgor to vote shall cease upon the occurrence of an Event of
Default, if the Pledgee so directs and notifies the Pledgor.

5. PAYMENTS AND OTHER DISTRIBUTIONS. Unless and until an Event of Default (as
defined in the Loan Agreement) shall occur and be continuing, all cash dividends
or distributions payable in respect of the Pledged Collateral (to the extent
such payments shall be permitted pursuant to the terms and provisions of the
Loan Agreement) shall be paid to the Pledgor; provided, however, upon an Event
of Default, all cash dividends or distributions payable in respect of the
Pledged Collateral shall be paid to the Pledgee as security for the Secured
Liabilities; provided, further, that all cash dividends and distributions
payable at any time (whether before or after an Event of Default) in respect of
the Pledged Collateral which are determined by Pledgee, in its sole discretion,
to represent in whole or in part an extraordinary, liquidating or other
distribution in return of capital shall be promptly paid and delivered to the
Pledgee and retained by the Pledgee as part of the Collateral. The Pledgee shall
be entitled to receive directly, and to retain as part of the Collateral:

(a) all other or additional securities or investment property, or rights to
subscribe for or purchase any of the foregoing, or property (other than cash)
paid or distributed by way of dividend in respect of the Pledged Collateral;

 

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(b) all other or additional securities, investment property or property
(including cash) paid or distributed in respect of the Pledged Collateral by way
of split, spin-off, split-up, reclassification, combination of shares or similar
rearrangement; and

(c) all other or additional securities, investment property or property which
may be paid in respect of the Collateral by reason of any consolidation, merger,
exchange, dividend, split, or distribution, conveyance of assets, liquidation or
similar reorganization or other disposition of Collateral (to the extent any of
the foregoing actions are permitted under the Loan Agreement).

If at any time the Pledgor shall obtain or possess any of the foregoing
Collateral described in this Section, the Pledgor shall be deemed to hold such
Collateral in trust for the Pledgee for the benefit of the Pledgee and the
Lenders, and the Pledgor shall promptly surrender and deliver such Collateral to
the Pledgee.

6. REMEDIES IN CASE OF AN EVENT OF DEFAULT. Upon the occurrence and during the
continuance of an Event of Default, the Pledgee shall be entitled to exercise
all of the rights, powers and remedies (whether vested in it by this Agreement,
the Loan Agreement, any other Financing Agreements, and/or in equity or by law,
and including, without limitation, all rights and remedies of a secured party of
a debtor in default under the UCC) for the protection and enforcement of its
rights in respect of the Collateral, and to the fullest extent permitted by
applicable law, the Pledgee shall be entitled, without limitation, to exercise
the following rights, which the Pledgor hereby agrees to be commercially
reasonable:

(a) to receive all amounts payable in respect of the Collateral otherwise
payable under Section 5 hereof to the Pledgor;

(b) to transfer all or any part of the Collateral into the Pledgee’s name or the
name of its nominee or nominees for the benefit of the Pledgee and the Lenders;

(c) to vote all or any part of the Collateral and otherwise act with respect
thereto as though it were the outright owner thereof;

(d) 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 the Pledgee’s offices or elsewhere, without demand of
performance, advertisement or notice of intention to sell or of time or place of
sale or adjournment thereof or to redeem (all of which, except as may be
required by mandatory provisions of applicable law, are hereby expressly and
irrevocably waived by the 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 the Pledgee in its absolute discretion
may determine. Pledgor agrees that to the extent that notice of sale shall be
required by law that at least ten (10) calendar days’ notice to the Pledgor of
the time (which shall be during normal business hours) and place of any public
sale or the time after which any private

 

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sale is to be made shall constitute reasonable notification. The Pledgee shall
not be obligated to make any sale of Collateral regardless of notice of sale
having been given. The Pledgee 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. 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, and all rights, if any of marshalling the
Collateral and any other security for the Secured Liabilities or otherwise. At
any such sale, unless prohibited by applicable law, the Pledgee may bid for and
purchase all or any part of the Collateral so sold free from any such right or
equity of redemption. Neither the Pledgee nor any of the Lenders shall be liable
for failure to collect or realize upon any or all of the Collateral or for any
delay in so doing nor shall the Pledgee nor any of the Lenders 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) in respect of the Collateral, to execute all such contracts, agreements,
deeds, documents and instruments, to bring, defend and abandon all such actions,
suits and proceedings, and to take all actions in relation to all or any part of
the Collateral as the Pledgee in its absolute discretion may determine;

(g) to appoint managers, sub-agents, officers and servants for any of the
purposes mentioned in the foregoing provisions of this Section and to dismiss
the same, all as the Pledgee in its absolute discretion may determine; and

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

7. REMEDIES, ETC., CUMULATIVE. Each right, power and remedy of the Pledgee (for
the benefit of the Pledgee and the Lenders) provided for in this Agreement, the
Loan Agreement, any Financing Agreement (as defined in the Loan Agreement) or
any other security agreement, mortgage, guaranty 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 the Pledgee (for the benefit of the Pledgee and the
Lenders) of any one or more of the rights, powers or remedies provided for in
this Agreement, the Loan Agreement, or any other Financing Agreement or now or
hereafter existing at law or in equity or by statute or otherwise shall not
preclude the simultaneous or later exercise by the Pledgee of all such other
rights, powers or remedies, and no failure or delay on the part of the Pledgee
to exercise any such right, power or remedy shall operate as a waiver thereof.

 

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8. APPLICATION OF PROCEEDS. Subject to any mandatory requirements of applicable
law and the terms of the Loan Agreement, all moneys collected by the Pledgee
(for the benefit of the Pledgee and the Lenders) upon sale or other disposition
of the Collateral, together with all other moneys received by the Pledgee
hereunder, shall be applied as follows:

(a) To the payment of any and all costs, expenses and fees (including, without
limitation, reasonable attorneys’ fees and disbursements) incurred by the
Pledgee directly or indirectly in connection with such sale or other
disposition, the delivery or taking possession of the Collateral or the
collection of any such moneys;

(b) Next, to the payment of the Secured Liabilities in accordance with the Loan
Agreement; and

(c) Any surplus then remaining shall be paid to the Pledgor.

9. INDEMNITY. Without duplication of any amounts payable under any other similar
indemnity provision set forth in the Loan Agreement or any other Financing
Agreements, the Pledgor shall: (i) pay all out-of-pocket costs and expenses of
the Pledgee incurred in connection with the administration of and in connection
with the preservation of rights under, and enforcement of, and any renegotiation
or restructuring of this Agreement and any amendment, waiver or consent relating
thereto (including, without limitation, the reasonable fees and disbursements of
counsel for the Pledgee); (ii) pay and hold the Pledgee and the Lenders harmless
from and against any and all present and future stamp or documentary taxes or
any other excise or property taxes, charges or similar levies which arise from
any payment made hereunder or from the execution, delivery or registration of,
or otherwise with respect to this Agreement and save the Pledgee and the Lenders
harmless from and against any and all liabilities with respect to or resulting
from any delay or omission to pay any such taxes, charges or levies; and
(iii) indemnify the Pledgee and each of the Lenders, and each of their
respective officers, directors, shareholders, employees, representatives and
agents from and hold each of them harmless against any and all costs, losses,
liabilities, claims, Liabilities, suits, penalties, judgments, damages or
expenses incurred by or asserted against any of them (whether or not any of them
is designated a party thereto) arising out of or by reason of this Agreement or
any transaction contemplated hereby (including, without limitation, any
investigation, litigation or other proceeding related to this Agreement),
including, without limitation, the reasonable fees and disbursements of counsel
incurred in connection with any such investigation, litigation or other
proceeding. If and to the extent that the Liabilities of the Pledgor under this
Section are unenforceable for any reason, the Pledgor hereby agrees to make the
maximum contribution to the payment and satisfaction of such Liabilities which
is permissible under applicable law. Notwithstanding anything in this Agreement
to the contrary, the Pledgor shall not be responsible to the Pledgee or any
Lender for any costs, losses, damages, liabilities or expenses which result from
the gross negligence or willful misconduct on the part of such Pledgee or any
Lender. The Pledgor’s Liabilities under this Section shall survive any
termination of this Agreement.

10. FURTHER ASSURANCES. Pledgor agrees that, at any time and from time to time,
the Pledgor will join with the Pledgee in executing and, at the Pledgors’ own
expense, will file and refile under the UCC such financing statements,
continuation statements and other documents in such offices as the Pledgee may
deem necessary or appropriate and wherever required or permitted by law in order
to perfect and preserve the Pledgee’s security interest in the Collateral, and
hereby authorizes the Pledgee to file financing statements and amendments

 

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thereto relative to all or any part of the Collateral without the signature of
the Pledgor, and agrees to do such further acts and things and to promptly
execute and deliver to the Pledgee such additional conveyances, assignments,
agreements and instruments as the Pledgee may require or deem advisable to carry
into effect the purpose of this Agreement or to further assure and confirm unto
the Pledgee its rights, powers and remedies hereunder.

11. REASONABLE CARE BY PLEDGEE. The Pledgee shall be deemed by the Pledgor 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 the Pledgee accords its own similar property.

12. TRANSFER BY THE PLEDGOR. Except with respect to the Infocrossing Stock Sale
and as otherwise permitted hereunder and under the other Financing Agreements,
the Pledgor shall not sell, transfer or otherwise dispose of, grant any option
with respect to, or pledge or otherwise encumber any of the Collateral or any
interest therein.

13. REPRESENTATIONS AND WARRANTIES OF THE PLEDGOR. Pledgor hereby represents and
warrants to the Pledgee for the benefit of the Pledgee and the Lenders, which
representations and warranties shall survive the execution and delivery of this
Agreement, as follows:

13.1 Validity, Perfection and Priority. The pledge and security interests in the
Collateral granted to the Pledgee constitute valid and continuing security
interests in the Collateral. The security interests in the Collateral granted to
the Pledgee for the benefit of the Pledgee and the Lenders hereunder constitute
valid and perfected security interests therein superior and prior to the rights
or claims of any other person or entity therein.

13.2 No Liens; Other Financing Statements.

(a) The Pledgor is the legal and beneficial owner of, and has good and
marketable title to, the Pledged Collateral.

(b) No financing statement or other evidence of lien covering or purporting to
cover any of the Collateral is on file in any public office.

13.3 Pledged Collateral.

(a) The Pledged Collateral described in Annex A attached hereto is, and all
other Pledged Collateral in which the Pledgor shall hereafter grant a lien or
security interest pursuant to Section 2 hereof will be, duly authorized, validly
issued, and fully paid, and, except for the pledge provided in Section 3.1
hereof in favor of Pledgee, none of such Pledged Collateral is or will be
subject to any legal or contractual restriction. The Pledged Collateral is, as
of the date hereof, and shall be at all times hereafter during the term of this
Agreement, freely transferable without restriction or limitation (except as
limited by the terms of this Agreement).

(b) The Pledged Collateral described in Annex A hereto constitutes all of the
issued and outstanding securities and investment property legally and
beneficially owned by the Pledgor on the date hereof in or relating to the
Issuer, except with respect to PXG Canada, Inc.

 

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13.4 Power and Authority. The Pledgor has the power and authority to pledge and
assign all of the Collateral pursuant to this Agreement. The Pledgor has
executed and delivered this Agreement, and this Agreement constitutes the legal,
valid and binding Liabilities of the Pledgor, enforceable against the Pledgor in
accordance with the terms herein, except as such enforceability may be limited
by bankruptcy, insolvency, reorganization and other similar laws affecting the
enforceability of agreements and by general principles of equity.

13.5 No Violation. Neither the execution, delivery or performance by the Pledgor
of this Agreement, nor compliance with the terms and provisions hereof by the
Pledgor nor the consummation of the transactions contemplated hereby will
conflict or be inconsistent with or result in any breach of, any of the terms,
covenants, conditions or provisions of, or constitute a default under any
agreement or other instrument to which Pledgor is a party.

13.6 Litigation. There are no actions, suits or proceedings pending or, to the
Pledgor’s best knowledge, threatened against or involving Pledgor before any
court with respect to any of the transactions contemplated by this Agreement or
the ability of the Pledgor to perform any of the Liabilities of the Pledgor
hereunder.

13.7 State of Incorporation. The Pledgor’s state of incorporation is Delaware.

13.8 Continued Existence. Until any transfer of the Pledged Collateral to any
Person as permitted after an Event of Default in accordance with Section 6
hereof, the Issuer shall continue in existence.

14. COVENANTS OF THE PLEDGOR. Pledgor covenants and agrees with the Pledgee that
on and after the date hereof and until all of the Secured Liabilities shall have
been indefeasibly paid in full and this Agreement terminates in accordance with
its terms:

14.1 Collateral. (a) The Pledgor will defend the Pledgee’s right, title and
security interest in and to the Collateral against the claims and demands of all
Persons whomsoever; (b) the Pledgor will have good and marketable title to and
right to pledge any other property at any time hereafter constituting Collateral
and will likewise defend the right thereto and security interest therein of the
Pledgee; and (c) Pledgor will not without the advance written consent of the
Pledgee, with respect to any Collateral, enter into any shareholder type
agreements, voting agreements, voting trusts, trust deeds, irrevocable proxies
or any other similar agreements or instruments, which would be inconsistent with
the terms of this Agreement or adversely affect the Pledgee’s interest in any of
the Collateral.

14.2 Right of Inspection. The Pledgee and its representatives shall upon
reasonable advance notice during normal business hours prior to a Default, or at
any time if a Default (as defined in the Loan Agreement) occurs or exists, have
full and free access to all the books, correspondence and records of the Pledgor
relating to the Collateral, if any, and the Pledgee and its representatives may
examine the same, take extracts therefrom and make photocopies thereof.

14.3 Compliance with Laws. The Pledgor will comply in all material respects with
all requirements of law applicable to the Collateral or any part thereof.

 

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14.4 Payment of Liabilities. Subject to Permitted Protests, the Pledgor will pay
promptly when due all taxes, assessments and governmental charges or levies
imposed upon the Collateral or in respect of any income or profits therefrom, as
well as all claims of any kind against or with respect to the Collateral.

14.5 No Impairment. The Pledgor will not take or permit to be taken any action
which could impair the Pledgee’s rights in the Collateral. The Pledgor will not
create, incur or permit to exist, will defend the Collateral against and will
take such other action as is necessary to remove, any lien or claim on or to the
Collateral, and will defend the right, title and interest of the Pledgee in and
to any of the Collateral against the claims and demands of all Persons
whomsoever.

14.6 Performance by Pledgee of Pledgor’s Liabilities; Reimbursement. If the
Pledgor fails to perform or comply with any of the agreements contained herein,
the Pledgee may, without notice to or consent by the Pledgor, perform or comply
or cause performance or compliance therewith, and the expenses of the Pledgee
incurred in connection with such performance or compliance shall be payable by
the Pledgor to the Pledgee on demand, and such reimbursement obligation shall be
secured hereby; provided, however, the Pledgee shall not be under any obligation
to take any such action.

14.7 Further Identification of Pledged Collateral. The Pledgor will furnish to
the Pledgee from time to time such reports in connection with the Pledged
Collateral as the Pledgee may reasonably request from time to time.

14.8 Continuous Perfection. The Pledgor will not change the Pledgor’s name, in
any manner which might make any financing or continuation statement filed
hereunder seriously misleading within the meaning of any applicable provision of
Article 9 of the UCC) unless the Pledgor shall have given the Pledgee at least
fifteen (15) days prior written notice thereof and shall have taken all action
necessary or reasonably requested by the Pledgee to amend such financing
statement or continuation statement so that it is not seriously misleading. The
Pledgor will not change the Pledgor’s state of organization unless the Pledgor
shall have given the Pledgee at least fifteen (15) days prior written notice
thereof and shall have taken such action as is necessary to cause the security
interest of the Pledgee in the Pledged Collateral to continue to be perfected.

14.9 Stay or Extension Laws. The Pledgor will not at any time claim, take,
insist upon or invoke the benefit or advantage of or from any law now or
hereafter in force providing for the valuation or appraisement of the Pledged
Collateral prior to any sale or sales thereof to be made pursuant to the
provisions hereof or pursuant to the decree, judgment, or order of any court of
competent jurisdiction; nor, after such sale or sales, claim or exercise any
right under any statute now or hereafter made or enacted by any state to redeem
the property so sold or any part thereof, and the Pledgor hereby expressly
waives, on behalf of the Pledgor and each and every person or entity claiming
by, through and under the Pledgor, all benefit and advantage of any such law or
laws, and covenants that the Pledgor will not invoke or utilize any such law or
laws or otherwise hinder, delay or impede the execution of any power, right or
remedy herein or hereby granted and delegated to the Pledgee, but will
authorize, allow and permit the execution of every such power, right or remedy
as though no such law or laws had been made or enacted.

 

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14.10 Issuer’s Records. The Pledgor shall cause the Issuer to make a notation on
its respective records indicating the interest granted hereby in favor of the
Pledgee.

15. PLEDGOR’S LIABILITIES ABSOLUTE, ETC. The Liabilities of the Pledgor under
this Agreement shall be absolute and unconditional in accordance with its terms
and shall remain in full force and effect (except as otherwise provided herein
under Section 19) without regard to, and shall not be released, suspended,
discharged, terminated or otherwise affected by, any circumstance or occurrence
whatsoever, including, without limitation: (a) any change in the time, place or
manner of payment of, or in any other term of, all or any of the Secured
Liabilities, any waiver, indulgence, renewal, extension, amendment or
modification of or addition, consent or supplement to or deletion from or any
other action or inaction under or in respect of this Agreement, the Loan
Agreement or any other Financing Agreement (as defined in the Loan Agreement),
or any of the other documents, instruments or agreements relating to the Secured
Liabilities or any other instrument or agreement referred to therein or any
assignment or transfer of any thereof; (b) any lack of validity or
enforceability of the Loan Agreement, or any other Financing Agreement (as
defined in the Loan Agreement), or any other documents, instruments or agreement
referred to therein or any assignment or transfer of any thereof; (c) any
furnishing of any additional security or collateral to the Pledgee, for the
benefit of the Pledgee and/or the Lenders; or its assignees or any acceptance
thereof or any release of any security by the Pledgee or its assignees; (d) any
limitation on any party’s liability or Liabilities under any such instrument or
agreement or any invalidity or unenforceability, in whole or in part, of any
such instrument or agreement or any term thereof; (e) any bankruptcy,
insolvency, reorganization, composition, adjustment, dissolution, liquidation or
other like proceeding relating to the Pledgor or any other Person, as
applicable, or any action taken with respect to this Agreement by any trustee or
receiver, or by any court, in any such proceeding, whether or not the Pledgor
shall have notice or knowledge of any of the foregoing; (f) any exchange,
release or nonperfection of any other collateral, or any release, or amendment
or waiver of or consent to departure from any guaranty or security, for all or
any of the Secured Liabilities; or (g) any other circumstance which might
otherwise constitute a defense available to, or a discharge of, the Pledgor.

16. NOTICES, ETC. Except as otherwise expressly provided herein, any notice
required or desired to be served, given or delivered hereunder shall be in the
form and manner specified below, and shall be addressed to the party to be
notified at the address set forth in Section 11 of the Loan Agreement; or to
such other address as each party designates to the other by notice in the manner
herein prescribed. Notice shall be deemed given hereunder if (i) delivered
personally or otherwise actually received, (ii) sent by overnight delivery
service, (iii) mailed by first-class United States mail, postage prepaid,
registered or certified, with return receipt requested, or (iv) sent via
telecopy machine with a duplicate signed copy sent on the same day as provided
in clause (ii) above. Notice mailed as provided in clause (iii) above shall be
effective upon the expiration of three (3) days after its deposit in the United
States mail, and notice telecopied as provided in clause (iv) above shall be
effective upon delivery of such telecopy if the duplicate signed copy is sent
under clause (ii) above. Notice given in any other manner described in this
Section shall be effective upon receipt by the addressee thereof; provided,
however, that if any notice is tendered to an addressee and delivery thereof is
refused by such addressee, such notice shall be effective upon such tender
unless expressly set forth in such notice.

 

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17. POWER OF ATTORNEY. Pledgor hereby absolutely and irrevocably constitutes and
appoints the Pledgee for the benefit of the Pledgee and the Lenders as Pledgor’s
true and lawful agent and attorney-in-fact with full power of substitution, in
the name of Pledgor upon the occurrence and during the continuance of an Event
of Default (as defined in the Loan Agreement): (a) to execute and do all such
assurances, acts and things which the 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 the Pledgee or any of its sub-agents, nominees or
attorneys may, in its or their sole and absolute discretion, reasonably
determine as necessary or advisable for the purpose of maintaining, preserving
or protecting the security constituted by this Agreement or any of the rights,
remedies, powers or privileges of the Pledgee under this Agreement; and
(c) generally, in the name of the Pledgor, exercise all or any of the powers,
authorities, and discretions conferred on or reserved to the Pledgee by or
pursuant to this Agreement, and (without prejudice to the generality of any of
the foregoing) to deliver or otherwise perfect any deed, assurance, agreement,
instrument or act as the Pledgee 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 the Pledgee or any of the Pledgee’s sub-agents or attorneys shall do or
purport to do in the exercise of the power of attorney granted to the Pledgee
pursuant to this Section, which power of attorney, being coupled with an
interest and given for security, is irrevocable.

18. MISCELLANEOUS. The Pledgor agrees with the Pledgee that each of the
Liabilities and liabilities of the Pledgor to the Pledgee under this Agreement
may be enforced against the Pledgor without the necessity of joining any other
Person (as defined in the Loan Agreement) as a party. This Agreement shall
create a continuing security interest in the Collateral and shall be binding
upon the heirs and legal beneficiaries, and permitted successors and assigns, of
the Pledgor, as applicable, and shall inure to the benefit of and be enforceable
by the Pledgee and its successors and assigns. Unless otherwise defined herein,
terms defined in the UCC as in effect in the State of Illinois are used herein
as therein defined. The headings and titles in this Agreement are for
convenience 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. If 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. The Pledgor shall
have no rights of subrogation as to any of the Pledged Collateral until full and
complete performance and payment of the Secured Liabilities. A faxed signature
hereto shall be deemed to be as legally binding as a signed original.

19. TERMINATION; RECOVERY CLAIM. This Agreement shall terminate after the
Secured Liabilities are indefeasibly paid in full and the Loan Agreement is
terminated in accordance with its terms. Notwithstanding the foregoing,
immediately prior to the Infocrossing Stock Sale, the Pledgee agrees to release
its pledge in that portion of the Pledged Collateral constituting the
Infocrossing Stock in order to permit the Pledgor to consummate such transaction
subject in all respects to the terms and provisions contained in the Loan
Agreement. Upon the termination of this Agreement, or as otherwise provided in
the Loan Agreement, the Pledgee, at the request of the Pledgor and at the cost
and expense of the Pledgor, will promptly execute and deliver to the Pledgor the
proper instruments acknowledging the termination of this Agreement and will duly
assign, transfer and deliver to the Pledgor or to whomsoever shall be

 

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lawfully entitled to receive the same (without recourse and without any
representation or warranty of any kind) such of the Collateral as may be in the
possession of the Pledgee and has not theretofore been sold or otherwise applied
or released pursuant to this Agreement. Should a claim (“Recovery Claim”) be
made upon the Pledgee or any or all of the Lenders at any time for recovery of
any amount received by the Pledgee or any or all of the Lenders in payment of
the Secured Liabilities (whether received from Pledgor or otherwise) and should
the Pledgee or any or all of the Lenders repay all or part of said amount by
reason of (a) any judgment, decree or order of any court or administrative body
having jurisdiction over the Pledgee or any or all of the Lenders or any of
their respective property; or (b) any settlement or compromise of any such
Recovery Claim effected by the Pledgee or any or all of the Lenders with the
claimant (including, without limitation, Pledgor), this Agreement and the
security interests granted to the Pledgee for the benefit of the Pledgee and the
Lenders hereunder shall continue in effect with respect to the amount so repaid
to the same extent as if such amount had never originally been received by the
Pledgee or any or all of the Lenders, notwithstanding any prior termination of
this Agreement, the return of this Agreement to the Pledgor, or the cancellation
of any note or other instrument evidencing the Secured Liabilities.

20. AMENDMENTS; MARSHALLING, ETC. None of the terms or provisions of this
Agreement may be waived, amended, supplemented or otherwise modified except by a
written instrument executed by the Pledgor and the Pledgee. The Pledgee shall be
under no obligation to marshal any assets or collateral in favor of the Pledgor
or any other person or entity or against or in payment of any or all of the
Secured Liabilities. All indemnities set forth herein shall survive the
execution and delivery of this Agreement and the making and repayment of the
Secured Liabilities. The Lenders are the intended third party beneficiaries of
this Agreement.

21. REVIEW OF AGREEMENT BY PLEDGOR. The Pledgor acknowledges that Pledgor has
thoroughly read and reviewed the terms and provisions of this Agreement, and
that such terms and provisions are clearly understood by the Pledgor, and has
been fully and unconditionally consented to by the Pledgor with the full benefit
and advice of counsel chosen by the Pledgor, and that the Pledgor has freely and
voluntarily signed this Agreement without duress.

22. WAIVER OF CLAIMS. Except as otherwise provided in this Agreement or
prohibited by law, PLEDGOR HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, NOTICE AND JUDICIAL HEARING IN CONNECTION WITH THE PLEDGEE’S
TAKING POSSESSION OR SALE OR THE PLEDGEE’S DISPOSITION OF ANY OF THE COLLATERAL,
INCLUDING, WITHOUT LIMITATION, ANY AND ALL PRIOR NOTICE AND HEARING FOR ANY
PREJUDGMENT REMEDY OR REMEDIES AND ANY SUCH RIGHT WHICH PLEDGOR WOULD OTHERWISE
HAVE UNDER THE CONSTITUTION OR ANY STATUTE OF THE UNITED STATES OR OF ANY STATE,
and Pledgor hereby further waives (and releases any cause of action and claim
against the Pledgee as a result of), to the fullest extent permitted by law:
(a) all damages occasioned by such taking of possession, collection or sale
except any damages which are the direct result of the Pledgee’s gross negligence
or willful misconduct; (b) all other requirements as to the time, place and
terms of sale or other requirements with respect to the enforcement of the
Pledgee’s rights hereunder; (c) demand of performance or other demand, notice of
intent to demand or accelerate, notice of acceleration, presentment, protest,

 

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advertisement or notice of any kind to or upon the Pledgor or any other person
or entity; and (d) all rights of redemption, appraisement, valuation, diligence,
stay, extension or moratorium now or hereafter in force under any applicable law
in order to delay the enforcement of this Agreement.

23. LIMITATION OF LIABILITY. No claim may be made by Pledgor or any other person
or entity against the Pledgee or any of the Lenders or the respective officers,
employees, affiliates, directors, shareholders, attorneys or agents of any of
them for any special, indirect, punitive or consequential damages in respect of
any claim for breach of contract or any other theory of liability (other than
gross negligence or wilful misconduct) arising out of or related to the
transactions contemplated by this Agreement, or any act, omission or event
occurring in connection therewith; and Pledgor hereby waives, releases and
agrees not to sue upon any such claim for any such damages, whether or not
accrued and whether or not known or suspected to exist in its favor.

24. GOVERNING LAW; SUBMISSION TO JURISDICTION.

(a) THIS AGREEMENT SHALL BE DEEMED TO HAVE BEEN MADE IN THE STATE OF ILLINOIS
AND THE VALIDITY OF THIS AGREEMENT, ITS CONSTRUCTION, INTERPRETATION AND
ENFORCEMENT, AND THE RIGHTS AND LIABILITIES OF PARTIES HEREUNDER, SHALL BE
DETERMINED UNDER, GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS
OF THE STATE OF ILLINOIS, WITHOUT REGARD TO CONFLICTS OF LAW OR CHOICE OF LAW
PRINCIPLES.

(b) THE PARTIES HERETO AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN
CONNECTION WITH OR RELATED TO THIS AGREEMENT SHALL BE TRIED AND LITIGATED ONLY
IN ANY COURT OF COMPETENT JURISDICTION LOCATED IN THE CITY OF ILLINOIS, BOROUGH
OF MANHATTAN. THE PLEDGOR WAIVES ANY RIGHT PLEDGOR MAY HAVE TO ASSERT THE
DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO SUCH VENUE AND HEREBY CONSENTS
TO ANY COURT ORDERED RELIEF. NOTHING CONTAINED IN THIS SECTION SHALL AFFECT THE
RIGHT OF THE PLEDGEE TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW
OR AFFECT THE RIGHT OF THE PLEDGEE TO BRING ANY ACTION OR PROCEEDING AGAINST THE
PLEDGOR OR PLEDGOR’S PROPERTY IN THE COURTS OF ANY OTHER JURISDICTION.

25. WAIVER OF TRIAL BY JURY. THE PLEDGOR AND THE PLEDGEE EACH KNOWINGLY,
VOLUNTARILY, IRREVOCABLY AND WITHOUT COERCION, WAIVE ALL RIGHTS TO TRIAL BY JURY
OF ALL DISPUTES BETWEEN THEM. THE SCOPE OF THIS WAIVER IS INTENDED TO BE
ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT
RELATE TO OR ARISE OUT OF THIS AGREEMENT OR TO THE SUBJECT MATTER OF THIS
AGREEMENT, INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, BREACH OF DUTY
CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. THE PLEDGOR AND THE
PLEDGEE EACH ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL

 

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INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY RELIED
ON THE WAIVER IN ENTERING INTO THIS AGREEMENT AND THAT EACH WILL CONTINUE TO
RELY ON THE WAIVER IN THEIR RELATED FUTURE DEALINGS. THE PLEDGOR AND THE PLEDGEE
FURTHER WARRANT AND REPRESENT THAT EACH HAS REVIEWED THIS WAIVER WITH ITS LEGAL
COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS
FOLLOWING CONSULTATION WITH LEGAL COUNSEL.

[signature page follows.]

 

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

 

PHOENIX FOOTWEAR GROUP, INC. By:    /s/ James Riedman  

Name: James Riedman

Its: Chief Executive Officer

GIBRALTAR BUSINESS CAPITAL, LLC By:   /s/ Darren M. Latimer  

Name: Darren M. Latimer

Its: Chief Executive Officer

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Annex A to Pledge Agreement

 

Issuer

   No. of
Shares     

Class

  

Cert. No.

   % Ownership    

Cert./Uncert.

H.S. Trask & Co.

              100 %    Cert.

Penobscot Shoe Company

              100 %    Cert

PXG Canada Inc.

              65 %    Cert

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ASSIGNMENT SEPARATE FROM STOCK CERTIFICATE

FOR VALUED RECEIVED, the undersigned hereby sells, assigns and transfers unto
                                                                 
                                        , 1 share of Common Stock of H.S.
Trask & Co., standing in the name of the undersigned on the books of said
corporation represented by Certificate No. 2 herewith and does hereby
irrevocably constitute and appoint                                          
                                                                         to
transfer the said stock on the books of the within named corporation with full
power of substitution in the premises.

Dated: November 3, 2010

 

PHOENIX FOOTWEAR GROUP, INC. By:   /s/ James Riedman  

Name: James Riedman

Its: Chief Executive Officer

--------------------------------------------------------------------------------

 

ASSIGNMENT SEPARATE FROM STOCK CERTIFICATE

FOR VALUED RECEIVED, the undersigned hereby sells, assigns and transfers unto
                                                                 
                                         , 1,135,265.50 shares of Common Stock
of Penobscot Shoe Company, standing in the name of the undersigned on the books
of said corporation represented by Certificate No. 7212 herewith and does hereby
irrevocably constitute and appoint                                          
                                                         to transfer the said
stock on the books of the within named corporation with full power of
substitution in the premises.

Dated: November 3, 2010

 

PHOENIX FOOTWEAR GROUP, INC. By:    /s/ James Riedman  

Name: James Riedman

Its: Chief Executive Officer

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ASSIGNMENT SEPARATE FROM STOCK CERTIFICATE

FOR VALUED RECEIVED, the undersigned hereby sells, assigns and transfers unto
                                                                 
                                         , 100 shares of Common Stock of PXG
Canada Inc. standing in the name of the undersigned on the books of said
corporation represented by Certificate No. 2 herewith and does hereby
irrevocably constitute and appoint                                          
                                                         to transfer the said
stock on the books of the within named corporation with full power of
substitution in the premises.

Dated: November 3, 2010

 

PHOENIX FOOTWEAR GROUP, INC. By:    /s/ James Riedman  

Name: James Riedman

Its: Chief Executive Officer