Exhibit 10.3

 

Execution Version

 

Pledge Agreement

 

This Pledge Agreement, dated as of October 1, 2014 (as the same may be amended,
supplemented and/or otherwise modified from time to time, this “Agreement”), is
made among the parties identified as “Pledgors” on the signature pages hereto
and such other parties as may become Pledgors hereunder after the date hereof
(each, a “Pledgor” and, collectively, the “Pledgors”) and White Oak Global
Advisors, LLC, a Delaware limited liability company, not in its individual
capacity but solely as Administrative Agent on behalf and for the benefit of
itself and Lenders (as hereinafter defined) (in such capacity, “Administrative
Agent”).

 

Recitals

 

A. VaultLogix, LLC, a Delaware limited liability company (“Borrower”), the
several entities from time to time party thereto as guarantors, the several
entities from time to time party thereto as lenders (collectively, “Lenders”)
and Administrative Agent have entered into are or are in the process of entering
into that certain Loan and Security Agreement, dated as of the date hereof (as
the same may be amended, supplemented and/or otherwise modified from time to
time, the “Loan Agreement”), pursuant to which Lenders have agreed to make
certain financial accommodations to Borrower from time to time on the terms and
subject to the conditions set forth therein.

 

B. InterCloud Systems, Inc., a Delaware corporation (“Parent”), has entered into
or is in the process of entering into that certain Continuing Guaranty, dated as
of the date hereof (as the same may be amended, supplemented and/or otherwise
modified from time to time, the “Guaranty”), pursuant to which Parent has
guaranteed, in favor of Administrative Agent, all obligations of Borrower under
the Loan Agreement on the terms and subject to the conditions set forth therein.

 

C. Pledgors are the record and beneficial owners of equity interests in each of
the companies (individually, a “Pledged Company,” and collectively, the “Pledged
Companies”) listed on Exhibit A attached hereto and incorporated herein by this
reference, and each owns, as of the date hereof, the percentage interest of the
outstanding equity securities (whether consisting of capital stock, membership
interests or otherwise) in each Pledged Company indicated thereon (each such
equity interest in a Pledged Company owned by a Pledgor, a “Pledged Share” and
all such shares collectively, the “Pledged Shares”), which Exhibit A may be
amended or supplemented pursuant to the terms of this Agreement.

 

D. As further security for the Secured Obligations (as defined below),
Administrative Agent and Lenders have requested that the Pledgors pledge their
interests in the Pledged Shares to the Administrative Agent.

 

E. In connection with the foregoing, Administrative Agent and Lenders have
required the Pledgors to enter into this Agreement.

 

 

 

 

 

NOW, THEREFORE, in consideration of these premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:

 

Article I
Definitions

 

Section 1.1. Definitions. Each term used herein that is defined in the UCC (as
hereinafter defined) but is not separately defined herein has the meaning set
forth in the UCC; subject to the foregoing, each capitalized term used but not
otherwise defined herein has the meaning ascribed thereto in the Loan Agreement.
In addition, (a) the rules of construction set forth in Section 1.02 of the Loan
Agreement shall apply as if fully set forth herein, mutatis mutandis, and (b) as
used herein:

 

“Act” has the meaning ascribed thereto in Section 6.2(c).

 

“Charter Documents” means: (a) with respect to any corporation, the certificate
or articles of incorporation and the bylaws (or equivalent or comparable
constitutive documents with respect to any non-U.S. jurisdiction) of such
Person; (b) with respect to any limited liability company, the certificate or
articles of formation or organization and operating agreement (or equivalent or
comparable constitutive documents with respect to any non-U.S. jurisdiction) of
such Person; and (c) with respect to any partnership, joint venture, trust or
other form of business entity, the partnership, joint venture or other
applicable agreement of formation or organization of such Person; and any
agreement, instrument, filing or notice with respect thereto filed in connection
with such Person’s formation or organization with the applicable Governmental
Authority in the jurisdiction of its formation or organization and, if
applicable, any certificate or articles of formation or organization of such
Person.

 

“Pledged Collateral” has the meaning ascribed thereto in Section 2.1.

 

“Secured Obligations” means all Obligations of Pledgors under all Loan Documents
(including, without limitation, the Guaranty), to which they are a party.

 

“UCC” means the Uniform Commercial Code as the same may, from time to time, be
in effect in the State of New York; provided that, in the event that, by reason
of mandatory provisions of law, any or all of the attachment, perfection or
priority of Administrative Agent’s security interest in any collateral is
governed by the Uniform Commercial Code as in effect in a jurisdiction other
than the State of New York, the term “UCC” shall mean the Uniform Commercial
Code as in effect in such other jurisdiction for purposes of the provisions
hereof relating to such attachment, perfection or priority and for purposes of
definitions related to such provisions.

 

2

 

 

Article II
Pledge

 

Section 2.1. Grant of Security Interest. As security for the full, prompt and
complete payment when due (whether at stated maturity, by acceleration or
otherwise) of all of the Secured Obligations, each Pledgor hereby pledges,
hypothecates, assigns, charges, mortgages, delivers, and transfers to
Administrative Agent, and hereby grants to Administrative Agent a continuing
security interest in all of such Pledgor’s right, title and interest (whether
now or hereafter existing or acquired) in and to the following (collectively,
the “Pledged Collateral”):

 

(a) the Charter Documents of each Pledged Company and the Pledged Shares and the
certificates (if any) representing such Pledged Shares for each Pledged Company,
and all dividends, cash, instruments, and other property or proceeds from time
to time received, receivable, or otherwise distributed in respect of or in
exchange for any or all of such Pledged Shares, including:

 

(i) all voting trust certificates (if any) held by such Pledgor evidencing its
beneficial interest in any Pledged Shares subject to any voting trust; and

 

(ii) all additional shares of equity interests of each Pledged Company and
voting trust certificates from time to time acquired by such Pledgor in any
manner (which additional shares shall be deemed to be part of Pledged Shares),
and the certificates representing such additional shares and all dividends,
cash, instruments, and other property or proceeds from time to time received,
receivable, or otherwise distributed in respect of or in exchange for any or all
of such additional shares; and

 

(b) the rents, issues, profits, returns, income, allocations, distributions and
proceeds of and from any and all of the foregoing.

 

At the request of Administrative Agent, each Pledgor shall cause each Pledged
Company to register Pledgor’s pledge of the Pledged Collateral to Administrative
Agent on the books of such Pledged Company.

 

Section 2.2. Continuing Security Interest. This Agreement shall create a
continuing security interest in the Pledged Collateral and shall:

 

(a) remain in full force and effect until all Secured Obligations are paid in
full;

 

(b) be binding upon Pledgors and their respective successors, transferees and
assigns; and

 

(c) inure, together with the rights and remedies of Administrative Agent
hereunder, to the benefit of Administrative Agent.

 

Upon the date that the Secured Obligations are paid in full, the security
interest granted herein shall terminate and all rights to the Pledged Collateral
shall revert to Pledgors. Upon any such termination, Administrative Agent shall,
at Borrower’s sole expense, deliver to the applicable Pledgor, without any
representations, warranties or recourse of any kind whatsoever, any and all
certificates and instruments representing or evidencing such Pledgor’s interest
in any Pledged Company that had been previously delivered by such Pledgor to
Administrative Agent, together with all other Pledged Collateral pledged by such
Pledgor held by Administrative Agent hereunder, free and clear of all liens
arising from or through Administrative Agent or any of the Lenders, and execute
and deliver to such Pledgor, at Borrower’s sole expense, such documents as such
Pledgor shall reasonably request to evidence such termination.

 

3

 

 

Section 2.3. No Assumption. This Agreement is executed and delivered to
Administrative Agent, for collateral security purposes only. Notwithstanding
anything herein to the contrary:

 

(a) each Pledgor shall remain liable under the contracts and agreements included
in the Pledged Collateral to the extent set forth therein and shall perform all
of its duties and obligations under such contracts and agreements to the same
extent as if this Agreement had not been executed;

 

(b) the exercise by Administrative Agent of any of its rights hereunder shall
not release any Pledgor from any of its duties or obligations under any such
contracts or agreements included in the Pledged Collateral; and

 

(c) Administrative Agent shall not have any obligation or liability under any
such contracts or agreements included in the Pledged Collateral by reason of
this Agreement, nor shall Administrative Agent be obligated to perform any of
the obligations or duties of any Pledgor thereunder or to take any action to
collect or enforce any claim for payment assigned hereunder, and Administrative
Agent shall not hereunder or otherwise (i) assume any obligation or liability
under or in connection with the Pledged Shares to any Person, and any such
assumption is hereby expressly disclaimed, or (ii) be deemed to have or be
vested with the duties, responsibilities or powers of the management of any
Pledged Company.

 

Article III

Representations and Warranties

 

Section 3.1. Representations and Warranties. Each Pledgor hereby represents and
warrants to Administrative Agent as follows:

 

(a) Organization. Such Pledgor has full power and authority to enter into and
perform its obligations under this Agreement.

 

(b) Legal Name. The legal name of such Pledgor is set forth on the signature
pages to this Agreement.

 

(c) Capacity; Due Authorization; Non-Contravention. The execution, delivery and
performance by such Pledgor of this Agreement and each other Loan Document
executed or to be executed by it have been duly authorized by all necessary
action by such Pledgor, and do not contravene the Organizational Documents of
such Pledgor; and in each case do not:

 

(i) contravene any contractual restriction, law or governmental regulation or
court decree or order binding on or affecting such Pledgor; or

 

(ii) result in, or require the creation or imposition of, any Lien on any of
such Pledgor’s properties except as contemplated hereby.

 

4

 

 

(d) Filing. No presently effective UCC financing statement covering any of the
Pledged Collateral is on file in any public office, except for UCC financing
statements in favor of Administrative Agent and in connection with Permitted
Liens.

 

(e) Ownership; No Liens. Such Pledgor is the legal and beneficial owner of, and
has good and valid title to (and has full right and authority to pledge and
assign) all Pledged Collateral pledged by such Pledgor hereunder, free and clear
of all Liens, except the Lien granted herein to Administrative Agent and
Permitted Liens. None of the Pledged Collateral of such Pledgor has been
transferred in violation of the securities registration, securities disclosure
or similar laws of any jurisdiction to which such transfer may be subject.

 

(f) Equity Interest. The equity class, certificate numbers, number of shares or
membership interests, as applicable, and percentage ownership of the Pledged
Shares of such Pledgor are set forth on Exhibit A attached hereto. Such Pledgor
agrees to amend Exhibit A attached hereto from time to time within ten (10)
Business Days of receiving any additional securities with respect to the Pledged
Shares, or of obtaining knowledge of circumstances causing the percentage
ownership to have changed.

 

(g) Certificate. No interest of such Pledgor in any Pledged Company is
represented by a stock certificate or other similar instrument, except, if any,
such certificates or instruments (together with all necessary instruments of
transfer or assignment, duly executed in blank) as have been delivered to
Administrative Agent and are held in its possession (and such Pledgor covenants
and agrees that any such certificates or instruments hereafter received by such
Pledgor with respect to any of the Pledged Collateral (together with all
necessary instruments of transfer or assignment, duly executed in blank) will be
promptly delivered to Administrative Agent).

 

(h) Information. All information with respect to the Pledged Collateral set
forth in any schedule, certificate or other writing at any time furnished by
such Pledgor to Administrative Agent is and shall be true and correct in all
material respects as of the date furnished.

 

(i) Authorization; Approval. No authorization, approval, or other action by, and
no notice to or filing with, any Governmental Authority, or any other Person is
required either:

 

(i) for the pledge by such Pledgor of any Pledged Collateral pursuant to this
Agreement or for the execution, delivery and performance of this Agreement by
such Pledgor; or

 

(ii) for the exercise by Administrative Agent of (A) the voting or other rights
provided for in this Agreement, or (B) the remedies in respect of the Pledged
Collateral pursuant to this Agreement, except, in the case of this clause
(ii)(B), as may be required in connection with a disposition of such equity
interests or membership interests by laws affecting the offering and sale of
securities generally, or as may be required under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976 and regulations issued relating thereto.

 

5

 

 

(j) First Priority Lien. The pledge and grant of a security interest in, and
delivery pursuant to this Pledge Agreement of, the Pledged Collateral of such
Pledgor (to the extent consisting of certificated equity interests) creates a
valid first priority perfected security interest on and in such Pledged
Collateral, and the proceeds thereof, securing the payment of the Secured
Obligations, subject to no prior Lien, assuming continued possession of the
original certificates, if any, evidencing the Pledged Shares constituting such
Pledged Collateral by Administrative Agent. Separately, the security interest on
and in the Pledged Collateral of such Pledgor will become a valid first priority
Lien upon the due filing of a UCC financing statement describing the Pledged
Collateral in the applicable filing offices in the State in which such Pledgor
was formed.

 

Article IV

Covenants

 

Section 4.1. Protect Pledged Collateral; Further Assurances. Except in
accordance with the terms of the Loan Documents, Pledgors shall not sell,
assign, transfer, pledge or otherwise encumber the Pledged Collateral in any
manner (except for the pledge granted herein to Administrative Agent and in
connection with Permitted Liens). Each Pledgor shall warrant and defend the
right and title granted by this Agreement to Administrative Agent in and to the
Pledged Collateral of such Pledgor (and all right, title and interest
represented by such Pledged Collateral) against the claims and demands of all
Persons whomsoever, but, except as otherwise expressly provided in the Loan
Documents, nothing contained herein shall prevent any Pledged Company from
issuing additional equity interests. Each Pledgor agrees that at any time, and
from time to time, such Pledgor shall promptly execute and deliver all further
instruments, and take all further action that may be necessary or desirable, as
Administrative Agent may reasonably request, in order to perfect and protect any
security interest granted or purported to be granted hereby or to enable
Administrative Agent to exercise and enforce its rights and remedies hereunder
with respect to any of the Pledged Collateral of such Pledgor as set forth in
Article VI. Each Pledgor further agrees that Administrative Agent may file, or
cause to be filed, any financing or continuation statements under the UCC with
respect to the security interests granted hereby, and that such financing or
continuation statements need not contain such Pledgor’s signature thereon.

 

Section 4.2. Voting Rights.

 

(a) Other than during the existence of an Event of Default:

 

(i) each Pledgor shall be entitled to exercise any and all voting and other
consensual rights pertaining to the Pledged Collateral or any part thereof for
any purpose not inconsistent with or in contravention of the provisions of the
Loan Documents; and

 

(ii) subject to and limited by the provisions of the Loan Documents, each
Pledgor shall, to the extent not prohibited by the Loan Agreement, be entitled
to receive and retain and use any and all dividends and interest; provided that
any and all (A) dividends or other payments paid or payable other than in cash
in respect of, and instruments and other property received, receivable or
otherwise distributed in respect of, or in exchange for, any Pledged Collateral,
and (B) dividends and other distributions paid or payable in cash in respect of
any Pledged Collateral in connection with a partial or total liquidation or
dissolution shall, except as provided in the Loan Agreement, in each of the
foregoing cases to the extent otherwise constituting Pledged Collateral,
forthwith be delivered to Administrative Agent to hold as Pledged Collateral and
shall, if received by any Pledgor, be received in trust for the benefit of
Administrative Agent, be segregated from the other property or funds of such
Pledgor, and be forthwith delivered to Administrative Agent as Collateral in the
same form as so received.

 

6

 

 

(b) If an Event of Default shall have occurred and be continuing and
Administrative Agent shall have notified Pledgors in writing of Administrative
Agent’s intention to exercise its voting power under Section 4.2, then each
Pledgor agrees:

 

(i) that Administrative Agent may exercise (to the exclusion of such Pledgor)
the voting power and all other incidental rights of ownership with respect to
the Pledged Collateral of such Pledgor and such Pledgor hereby grants
Administrative Agent, from the date hereof until the Secured Obligations are
paid in full and the termination of the commitments of the Lenders to extend
credit under the Loan Documents, an irrevocable proxy, coupled with an interest
exercisable under such circumstances, to vote such Pledged Collateral; and

 

(ii) promptly to deliver to Administrative Agent such additional proxies and
other documents as may be necessary to allow Administrative Agent to exercise
such voting power.

 

All payments and proceeds which may at any time and from time to time be held by
any Pledgor but which such Pledgor is obligated to deliver to Administrative
Agent shall be held by such Pledgor separate and apart from its other property
in trust for Administrative Agent. Unless an Event of Default shall have
occurred and be continuing and Administrative Agent shall have given the notice
referred to in this Section 4.2, each Pledgor shall have the exclusive voting
power with respect to its respective Pledged Collateral and Administrative Agent
shall, upon the written request of any Pledgor, promptly deliver such proxies
and other documents, if any, as shall be reasonably requested by such Pledgor
which are necessary to allow such Pledgor to exercise voting power with respect
to such Pledged Collateral; provided that no vote shall be cast, or consent,
waiver or ratification given or action taken by any Pledgor that would impair
any Pledged Collateral or be inconsistent with or violate any provision of the
Loan Documents without the prior written consent of Administrative Agent.

 

Section 4.3. Filings; Recordings. Pledgors shall execute such documents, and do
such other acts and things, all as Administrative Agent may from time to time
reasonably request to establish and maintain a valid, perfected pledge of, and
security interest in, the Pledged Collateral in favor of Administrative Agent.

 

Section 4.4. Information. Pledgors shall furnish Administrative Agent such
information concerning the Pledged Collateral as Administrative Agent may from
time to time reasonably request, and will permit Administrative Agent and its
designees, from time to time during normal business hours, to inspect, audit and
make copies of and extracts from all records and all other papers in the
possession of any Pledgor which pertain to the Pledged Collateral, and shall
upon the request of Administrative Agent, deliver to Administrative Agent copies
of all of such records and papers.

 

7

 

 

Section 4.5. Notice of Dissolution. Pledgors shall promptly notify
Administrative Agent in writing upon learning of the occurrence of any event
which might or would cause termination and/or dissolution of any Pledged
Company.

 

Article V

Administrative Agent

 

Section 5.1. Administrative Agent Appointed Attorney-in-Fact. Each Pledgor
hereby irrevocably appoints Administrative Agent to be such Pledgor’s
attorney-in-fact, with full authority in the place and stead of such Pledgor and
in the name of such Pledgor or otherwise, from time to time in Administrative
Agent’s discretion after the occurrence and during the continuance of an Event
of Default, to take any action and to execute any instrument which
Administrative Agent may reasonably deem necessary or advisable to accomplish
the purposes of this Agreement, including:

 

(a) after the occurrence and during the continuance of an Event of Default, to
ask demand, collect, sue for, recover, compromise, receive and give acquittance
and receipts for moneys due and to become due under or in respect of any of the
Pledged Collateral;

 

(b) to receive, endorse, and collect any drafts or other instruments, documents
and chattel paper, in connection with clause (a) above; and

 

(c) to file any claims or take any action or institute any proceedings which
Administrative Agent may reasonably deem necessary or desirable for the
collection of any of the Pledged Collateral or otherwise to enforce the rights
of Administrative Agent with respect to any of the Pledged Collateral.

 

Each Pledgor hereby acknowledges, consents and agrees that the power of attorney
granted pursuant to this Section 5.1, being coupled with an interest, is
irrevocable.

 

Section 5.2. Administrative Agent May Perform. If any Pledgor fails to perform
any agreement contained herein, Administrative Agent may itself perform, or
cause performance of, such agreement for the benefit of itself and not for such
Pledgor and the expenses of Administrative Agent incurred in connection
therewith shall be payable by Borrower pursuant to Section 6.4.

 

Section 5.3. Administrative Agent Has No Duty. The powers conferred on
Administrative Agent hereunder are solely to protect its interest in the Pledged
Collateral and shall not impose any duty on it to exercise any such powers.
Administrative Agent shall have no duty as to any Pledged Collateral or
responsibility for (a) ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relative to any
Pledged Collateral, whether or not Administrative Agent has or is deemed to have
knowledge of such matters, or (b) taking any necessary steps to preserve rights
against prior parties or any other rights pertaining to any Pledged Collateral.
Without limiting the generality of the preceding sentence, Administrative Agent
shall be deemed to have exercised reasonable care in the custody and
preservation of any of the Pledged Collateral if it takes such action for that
purpose as a Pledgor reasonably requests in writing at times other than upon the
occurrence and during the continuance of any Event of Default. Failure of
Administrative Agent to comply with any such request at any time shall not in
itself be deemed a failure to exercise reasonable care.

 

8

 

 

Section 5.4. Notice of this Agreement. Pledgors shall notify each Pledged
Company of the existence of this Agreement by sending to it a notice in
substantially the form attached hereto as Exhibit B within three (3) Business
Days of the date of its execution and delivery of this Agreement.

 

Section 5.5. Irrevocable Proxy. Each Pledgor shall execute and deliver an
irrevocable proxy coupled with an interest substantially in the form attached
hereto as Exhibit C with respect to each Pledged Company.

 

Article VI

Defaults and Remedies

 

Section 6.1. Events of Default. It shall be an “Event of Default” hereunder if
any Event of Default (as defined in any of the Loan Documents) shall occur.

 

Section 6.2. Certain Remedies. Subject to the terms of the Loan Documents, if
any Event of Default shall have occurred and be continuing:

 

(a) Administrative Agent may, in addition to other rights and remedies provided
for herein or otherwise available to it, (i) exercise in respect of the Pledged
Collateral all the rights and remedies of a secured party under the UCC (whether
or not the UCC applies to the affected Pledged Collateral) and/or (ii) without
notice except as specified below, sell the Pledged Collateral or any part
thereof in one or more parcels at public or private sale in compliance with
applicable laws, at any of Administrative Agent’s offices or elsewhere, for
cash, on credit or for future delivery, and upon such other terms as
Administrative Agent may deem commercially reasonable. Pledgors agree that, to
the extent notice of sale shall be required by law, at least ten (10) days’
prior notice shall be given to any Pledgor of the time and place of any public
sale or the time after which any private sale is to be made and that such notice
shall constitute reasonable notification. Administrative Agent shall not be
obligated to make any sale of Pledged Collateral regardless of notice of sale
having been given. Administrative Agent may adjourn any public or private sale
from time to time by announcement at the time and place fixed therefor, and such
sale may, without further notice, be made at the time and place to which it was
so adjourned.

 

(b) Administrative Agent may:

 

(i) transfer all or any part of the Pledged Collateral into the name of
Administrative Agent or its nominee, with or without disclosing that such
Pledged Collateral is subject to the Lien hereunder;

 

(ii) notify the parties obligated on any of the Pledged Collateral to make
payment to Administrative Agent of any amount due or to become due thereunder;

 

(iii) enforce collection of any of the Pledged Collateral by suit or otherwise,
and surrender, release or exchange all or any part thereof, or compromise or
extend or renew for any period (whether or not longer than the original period)
any obligations of any nature of any party with respect thereto;

 

9

 

 

(iv) endorse any checks, drafts, or other writings in any Pledgor’s name to
allow collection of the Pledged Collateral;

 

(v) take control of any proceeds of the Pledged Collateral; and

 

(vi) execute (in the name, place and stead of the applicable Pledgor)
endorsements, assignments and other instruments of conveyance or transfer with
respect to all or any of the Pledged Collateral.

 

(c) If, at any time when Administrative Agent shall determine to exercise its
right to sell the whole or any part of the Pledged Collateral hereunder, such
Pledged Collateral or the part thereof to be sold shall not, for any reason
whatsoever, be effectively registered under Securities Act of 1933, as amended
(as so amended the “Act”), Administrative Agent may, in its discretion (subject
only to applicable requirements of law), sell such Pledged Collateral or part
thereof by private sale in such manner and under such circumstances as
Administrative Agent may reasonably deem necessary or advisable, but subject to
the other requirements of this Section 6.2(c), and shall not be required to
effect such registration or cause the same to be effected. Without limiting the
generality of the foregoing, in any such event Administrative Agent may, in its
sole discretion, (i) in accordance with applicable securities laws, proceed to
make such private sale notwithstanding that a registration statement for the
purpose of registering such Pledged Collateral or part thereof could be or shall
have been filed under the Act; and (ii) restrict such sale to a purchaser who
will represent and agree that such purchaser is purchasing for its own account,
for investment, and not with a view to the distribution or sale of such Pledged
Collateral or part thereof. In addition to a private sale as provided above in
this Section 6.2(c), if any of the Pledged Collateral shall not be freely
distributable to the public without registration under the Act at the time of
any proposed sale hereunder, then Administrative Agent shall not be required to
effect such registration or cause the same to be effected but may, in its sole
and reasonable discretion (subject only to applicable requirements of law),
require that any sale hereunder (including a sale at auction) be conducted
subject to such restrictions as Administrative Agent may, in its sole
discretion, deem necessary or appropriate in order that such sale
(notwithstanding, any failure so to register) may be effected in compliance with
the Bankruptcy Code and other laws affecting the enforcement of creditors’
rights and the Act and all applicable state securities laws.

 

(d) Pledgors agree that a breach of any covenants contained in this Article VI
with the effect of denying Administrative Agent the realization of the practical
benefits to be provided by this Agreement will cause irreparable injury to
Administrative Agent, that in such event Administrative Agent would have no
adequate remedy at law in respect of such breach and, as a consequence, that in
such event each and every covenant contained in this Article VI shall be
specifically enforceable against Pledgors, and each Pledgor hereby waives and
agrees not to assert any defenses against an action for specific performance of
such covenants except for a defense that the Secured Obligations are not then
due and payable.

 

10

 

 

Section 6.3. Compliance with Restrictions. Each Pledgor agrees that in any sale
of any of the Pledged Collateral, whether at a foreclosure sale or otherwise,
Administrative Agent is hereby authorized to comply with any limitation or
restriction in connection with such sale as it may be advised by counsel is
necessary in order to avoid any violation of applicable law (including
compliance with such procedures as may restrict the number of prospective
bidders and purchasers, require that such prospective bidders and purchasers
have certain qualifications and restrict such prospective bidders and purchasers
to persons who will represent and agree that they are purchasing for their own
account for investment and not with a view to the distribution or resale of such
Pledged Collateral), or in order to obtain any required approval of the sale or
of the purchaser by any Governmental Authority, and each Pledgor further agrees
that such compliance shall not result in such sale being considered or deemed
not to have been made in a commercially reasonable manner, nor shall
Administrative Agent be liable or accountable to any Pledgor for any discount
allowed by the reason of the fact that such Pledged Collateral is sold in
compliance with any such limitation or restriction.

 

Section 6.4. Application of Proceeds. All amounts and proceeds received under
any enforcement or collection under this Agreement will be applied in reduction
of the Secured Obligations in the order set forth in the Loan Agreement, and
each Pledgor irrevocably waives the right to direct the application of such
proceeds and acknowledges and agrees that Administrative Agent shall have the
continuing and exclusive right to apply and reapply any and all such proceeds in
the manner set forth in the Loan Agreement, notwithstanding any entry to the
contrary upon any of its books and records.

 

Article VII

General Provisions

 

Section 7.1. Continuing Agreement.

 

(a) This Agreement shall be a continuing agreement in every respect and shall
remain in full force until the Secured Obligations are satisfied. Upon the date
that the Secured Obligations are paid in full, this Agreement and the liens and
security interests of Administrative Agent hereunder shall be automatically
terminated and Administrative Agent shall, upon the request and at the expense
of the Pledgors, forthwith release all of its liens and security interests
hereunder and shall execute and deliver all UCC termination statements and/or
other documents reasonably requested by the Pledgors evidencing such
termination. Notwithstanding the foregoing, all releases and indemnities
provided hereunder shall survive termination of this Agreement.

 

(b) This Agreement shall continue to be effective or be automatically
reinstated, as the case may be, if at any time payment, in whole or in part, of
any of the Secured Obligations is rescinded or must otherwise be restored or
returned by Administrative Agent or any Lender as a preference, fraudulent
conveyance or otherwise under any bankruptcy, insolvency or similar law, all as
though such payment had not been made; provided that in the event payment of all
or any part of the Secured Obligations is rescinded or must be restored or
returned, all reasonable costs and expenses (including, without limitation,
reasonable attorneys’ fees and disbursements) incurred by Administrative Agent
or any Lender in defending and enforcing such reinstatement shall be deemed to
be included as a part of the Secured Obligations.

 

Section 7.2. Amendments; Waivers. This Agreement and the provisions hereof may
not be amended, waived, modified, changed, discharged or terminated except by a
written notice instrument executed by each Pledgor and Administrative Agent;
provided that Administrative Agent may not amend, waive, modify, change,
discharge or terminate any provision of this Agreement without the written
consent of the parties required under the Loan Agreement.

 

11

 

 

Section 7.3. Right to Amend or Modify Obligations and/or Pledged Collateral.
Each Pledgor authorizes Administrative Agent or Lenders, at their sole
discretion, subject to the Loan Documents, with or without notice and without
affecting Pledgor’s liability hereunder, from time to time to: (a) change the
time or manner of payment of any Secured Obligations by renewal, extension,
modification, acceleration or otherwise; (b) alter or change any provision of
any Secured Obligations, including, but not limited to, the rate of interest
thereon, and any document, instrument or agreement (other than this Agreement)
evidencing, guaranteeing, pledging, securing or related to any Secured
Obligations; (c) release, discharge, exonerate, substitute or add one or more
parties liable on any Secured Obligations or one or more endorsers, cosigners or
pledgors for any Secured Obligations; (d) obtain collateral for the payment of
any Secured Obligations or any pledge thereof; (e) release existing or
after-acquired collateral on such terms as Administrative Agent and Lenders, in
their sole discretion, shall determine; (f) apply any sums received from
Borrower, any endorser, cosigner, other pledgor or other person liable on any
Secured Obligations or from the sale or collection of collateral or its proceeds
to any Secured Obligations whatsoever owed or to be owed to Administrative Agent
or Lenders by Borrower in any order or amount and regardless of whether or not
such Obligations are pledged hereby, are secured by collateral or are due and
payable; and (g) apply any sums received from Pledgor or from the sale of
collateral granted by Pledgor to any Secured Obligations in any order or amount
regardless of whether such Secured Obligations are secured by collateral or is
due and payable.

 

Section 7.4. Waivers. Each Pledgor hereby unconditionally and irrevocably
acknowledges and agrees as follows:

 

(a) Deficiency. In the event that any Obligations are now or hereafter secured
by a deed of trust, each Pledgor waives any defense and all rights and benefits
of any laws purporting to state that no deficiency judgment may be recovered on
certain real property purchase money obligations and any laws purporting to
state that no deficiency judgment may be recovered after a trustee’s sale under
a deed of trust. Each Pledgor acknowledges that a foreclosure by a trustee’s
sale under a deed of trust may result in the destruction of Pledgor’s
subrogation rights that may otherwise exist and that a destruction of those
rights may create a defense to a deficiency judgment against borrower and/or
pledgor.

 

 

Each Pledgor waives all rights and defenses that Pledgor may have because the
Obligations or any portion thereof is secured by real property. This means,
among other things:

 

(1) Administrative Agent or Lenders may collect from each Pledgor without first
foreclosing on any real or personal property pledged by Borrower.

 

12

 

 

(2) If Administrative Agent or any Lender forecloses on any real property
collateral pledged by Borrower: 

 

A. The amount of the Obligations may be reduced only by the price for which that
collateral is sold at the foreclosure sale, even if the collateral is worth more
than the sale price.

 

B. Administrative Agent may collect from each Pledgor even if administrative
agent or lenders, by foreclosing on the real property collateral, has destroyed
any right Pledgor may have to collect from borrower.

  

This is an unconditional and irrevocable waiver of any rights and defenses
Pledgor may have because the obligations are secured by real property.

 

(b) Election of Remedies. To the maximum extent permitted by applicable law,
each Pledgor waives any defense based upon Pledgor’s loss of a right against
Borrower arising from Administrative Agent’s or a Lender’s election of a remedy
on any Obligations under bankruptcy or other debtor’s relief laws or under any
other laws, including, but not limited to, any purporting to reduce
Administrative Agent’s or any Lender’s right against Pledgor in proportion to
the principal obligation of any Obligations. Without limiting the generality of
the foregoing, to the maximum extent permitted by applicable law, each Pledgor
waives all rights and defenses arising out of an election of remedies by
Administrative Agent, even if that election of remedies, such as a nonjudicial
foreclosure with respect to security for a pledged obligation, has the effect of
destroying Pledgor’s rights of subrogation and reimbursement against Borrower.

 

(c) Statute of Limitations. To the maximum extent permitted by law, each Pledgor
waives the benefit of the statute of limitations affecting Pledgor’s liability
hereunder or the enforcement hereof.

 

(d) Action Against Borrower and Collateral (and Other Remedies). To the maximum
extent permitted by applicable law, each Pledgor waives all right to require
Administrative Agent to: (i) proceed against Borrower, any endorser, cosigner,
other pledgor or other person or entity liable on any Indebtedness; (ii) join
Borrower or any endorser, cosigner, other pledgor or other person liable on any
Obligations in any action or actions that may be brought and prosecuted by
Administrative Agent or Lenders solely and separately against each Pledgor on
any Obligations; (iii) proceed against any item or items of collateral securing
any Obligations or any pledge or guaranty thereof, or (iv) pursue or refrain
from pursuing any other remedy whatsoever in Administrative Agent’s or Lenders’
power.

 

13

 

 

(e) Borrower’s Defenses. Each Pledgor waives any defense arising by reason of
any disability or other defense of Borrower, any successor or any endorser,
cosigner, other pledgor or other person liable on any Indebtedness, other than
payment in full of the Obligations, including, without limitation, any statute
of limitation defense that may be available to Borrower or such other person.
Until all Obligations have been paid in full, even though it may be in excess of
the liability incurred hereby and Lenders have no further commitment to lend or
extend financial accommodations to Borrower, no Pledgor shall have any right of
subrogation and each Pledgor waives any benefit of and right to participate in
any collateral now or hereafter held by Administrative Agent or Lenders. Each
Pledgor waives all presentments, demands for performance, notices of
nonperformance, protests, notices of protest, notices of dishonor, notices of
sale of any collateral securing any Obligations or any pledge or guaranty
thereof, and notice of the existence, creation or incurring of new or additional
Indebtedness.

 

(f) Borrower’s Financial Condition. Each Pledgor hereby recognizes, acknowledges
and agrees that advances may be made from time to time with respect to any
Obligations without authorization from or notice to Pledgor even though the
financial condition of Borrower, any endorser, cosigner, other pledgor or other
person liable on any Obligations may have deteriorated since the date of this
Agreement. Each Pledgor waives all right to require Lenders to disclose any
information with respect to any Obligations; the financial condition, credit or
character of Borrower, any endorser, cosigner, other pledgor or other person
liable on any Obligations; any collateral securing any Indebtedness or any
pledge or guaranty thereof, or any action or inaction on the part of Lenders,
Borrower or any endorser, cosigner, other pledgor or other person liable on any
Obligations. Each Pledgor hereby assumes the responsibility for being informed
of the financial condition, credit and character of Borrower and of all
circumstances bearing upon the risk of non-payment of any Obligations which
diligent inquiry would reveal.

 

Section 7.5. Protection of Pledged Collateral. Administrative Agent may from
time to time, at its option, perform any act which any Pledgor agrees hereunder
to perform and which such Pledgor shall fail to perform after being requested in
writing so to perform (it being understood that no such request need be given
after the occurrence and during the continuance of any Event of Default) and
Administrative Agent may from time to time take any other action which
Administrative Agent reasonably deems necessary for the maintenance,
preservation or protection of any of the Pledged Collateral or of its security
interest therein, all such actions being for the express benefit of
Administrative Agent and not such Pledgor.

 

Section 7.6. Notices. All notices required or permitted to be given under this
Agreement shall be given at the address specified below, or at such other
address as may be designated in a written notice to the other parties hereto:

 

  if to the Pledgors: InterCloud Systems, Inc.     1030 Broad Street, Suite 102
    Shrewsbury, NJ 07702     Attention:                                         
      if to Administrative Agent: White Oak Global Advisors, LLC     3
Embarcadero Center, Suite 550     San Francisco, CA 94111     Attention: Barbara
J.S. McKee

 

Section 7.7. Counterparts. This Agreement may be executed in any number of
counterparts, each of which where so executed and delivered shall be an
original, but all of which shall constitute one and the same instrument. It
shall not be necessary in making proof of this Agreement to produce or account
for more than one such counterpart. Delivery of executed counterparts of this
Agreement by facsimile or other electronic means shall be effective as an
original.

 

14

 

 

Section 7.8. Severability; Headings. Wherever possible each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under such law, such provision shall be ineffective to the extent of
such prohibition or invalidity without invalidating the remainder of such
provision or the remaining provisions of this Agreement.

 

Section 7.9. Assignment. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors, assigns and
transferees, provided that no Pledgor may assign its rights or obligations
hereunder to any Person.

 

Section 7.10. Governing Law; Jurisdiction; Etc.

 

(a) This Agreement shall be governed by, and construed in accordance with, the
internal laws of the state of New York.

 

(b) Each of the parties hereto irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of the courts of the
state of New York sitting in New York county in the borough of manhattan and of
the United States District Court for the Southern District of New York, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this agreement or any other Loan Document to which each is a party,
or for recognition or enforcement of any judgment, and each of the parties
hereto irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in such state courts or,
to the fullest extent permitted by applicable Laws, in such federal courts. Each
of the parties hereto agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Nothing in this
agreement or in any other Loan Document shall affect any right that
administrative agent or any lender may otherwise have to bring any action or
proceeding relating to this agreement or any other Loan Document against any
loan party or any of its properties in the courts of any other jurisdiction.

 

(c) Each of the parties hereto irrevocably and unconditionally waives, to the
fullest extent permitted by applicable Laws, any objection that it may now or
hereafter have to the laying of venue of any action or proceeding arising out of
or relating to this Agreement or any other Loan Document in any court referred
to in subsection (b) of this section 7.10. each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by applicable laws, the
defense of an inconvenient forum to the maintenance of such action or proceeding
in any such court.

 

15

 

 

(d) Each party hereto irrevocably consents to service of process in the manner
provided for notices in Section 7.6. nothing in this agreement will affect the
right of any party hereto to serve process in any other manner permitted by
applicable laws.

 

Section 7.11. Waiver of Jury Trial.

 

To the extent permitted by applicable Laws, each of the parties hereto hereby
waives its right to a jury trial of any Claim. 

 

Section 7.12. Entire Agreement. This Agreement, the Loan Documents and the other
documents relating to the Secured Obligations represent the entire agreement of
the parties hereto and thereto, and supersede all prior agreements and
understandings, oral or written, if any, including, but not limited to, any
commitment letters or correspondence relating to the Loan Documents, any other
documents relating to the Secured Obligations, or the transactions contemplated
herein and therein.

 

Section 7.13. Other Security. To the extent that any of the Secured Obligations
are now or hereafter secured by property other than the Pledged Collateral or by
a guarantee, endorsement or property of any Person other than Pledgor, then
Administrative Agent and the Lenders shall have the right to proceed against
such other property, guarantee or endorsement upon the occurrence of any Event
of Default, and Administrative Agent and the Lenders shall have the right, in
their sole discretion, to determine which rights, security, liens, security
interests or remedies Administrative Agent shall at any time pursue, relinquish,
subordinate, modify or take with respect thereto, without in any way modifying
or affecting any of them or the Secured Obligations or any of the rights of
Administrative Agent or the Lenders under this Agreement, under any of the Loan
Documents or under any other document relating to the Secured Obligations.

 

Section 7.14. Joinder. At any time after the date of this Agreement, one or more
additional Persons may become party hereto by executing and delivering to
Administrative Agent a joinder agreement substantially in the form of Exhibit D
attached hereto (a “Joinder Agreement”). Immediately upon such execution and
delivery of a Joinder Agreement (and without any further action), each such
additional Person will become a party to this Agreement as a “Pledgor” and have
all of the rights and obligations of a Pledgor hereunder and this Agreement and
the schedules hereto shall be deemed amended by such Joinder Agreement.

 

Section 7.15. Rights of Required Lenders. All rights of Administrative Agent
hereunder, if not exercised by Administrative Agent, may be exercised by the
Required Lenders.

 

[Signature Page Follows.]

 

16

 

 

In Witness Whereof, the parties hereto have caused this pledge agreement to be
duly executed and delivered by their respective duly authorized persons as of
the date first written above.

 

Pledgors:

InterCloud Systems, Inc.,

a Delaware corporation 

 

By: /s/ Mark E. Munro   Name: Mark E. Munro   Title: CEO  

 

U.S. Data Security Acquisition, LLC,

a Delaware limited liability company

 

By: /s/ Lawrence Sands   Name: Lawrence Sands   Title: Secretary  

 

Pledge Agreement (VaultLogix)

 

 

 

 

Accepted and agreed:

 

White Oak Global Advisors, LLC, 

a Delaware limited liability company, as Administrative Agent

 

By: /s/ Barbara J. S. McKee   Name: Barbara J. S. McKee   Title: Managing Member
 

 

 

Pledge Agreement (VaultLogix)