Document:

Term Loan Note

  
 EXHIBIT 10.5

 TERM LOAN NOTE 
  

			
	$500,000	  	November 3, 2010
		  	Northbrook, Illinois

 FOR VALUE
RECEIVED, the undersigned, PHOENIX FOOTWEAR GROUP, INC., a Delaware corporation (“Phoenix”), PENOBSCOT SHOE COMPANY, a Maine corporation (“Penobscot”), and H.S. TRASK & CO., a Montana
corporation (“Trask”; Phoenix, Penobscot and Trask are individually and/or collectively referred to as the “Borrower”), hereby, jointly and severally, promise to pay to the order of GIBRALTAR BUSINESS CAPITAL,
LLC, a Delaware limited liability company (together with its successors and assigns, the “Lender”), at its office at 60 Revere Drive, Suite 840, Northbrook, Illinois 60022 or at such other place as the holder hereof may
designate in writing, in lawful money of the United States of America, the principal sum of Five Hundred Thousand Dollars ($500,000), or such lesser principal sum as may then be owed by the Borrower to the Lender hereunder, on or before the Stated
Maturity Date (as defined in the Loan Agreement (as defined below)). 
 THE INDEBTEDNESS EVIDENCED HEREBY SHALL BECOME
IMMEDIATELY DUE AND PAYABLE UPON THE EARLIEST TO OCCUR OF (X) THE STATED MATURITY DATE; (Y) THE ACCELERATION OF THE LIABILITIES (AS DEFINED IN THE LOAN AND SECURITY AGREEMENT OF EVEN DATE HEREWITH AMONG THE BORROWER, GIBRALTAR BUSINESS
CAPITAL, LLC (THE “AGENT”), THE LENDER AND THE LENDER PARTIES THERETO (AS AMENDED OR MODIFIED FROM TIME TO TIME, THE “LOAN AGREEMENT”) PURSUANT TO SECTION 10.2 OF THE LOAN AGREEMENT; AND (Z) THE TERMINATION OF
THE LOAN AGREEMENT (WHETHER BY PREPAYMENT OR OTHERWISE) IN ACCORDANCE WITH ITS TERMS. Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Loan Agreement. 

This Term Loan Note shall bear interest on the unpaid principal amount hereof from time to time outstanding from the date hereof until
the Stated Maturity Date, or until maturity due to acceleration or otherwise and, after maturity, until paid, at the rates per annum and upon the terms specified in the Loan Agreement. Accrued interest on the Term Loan (as defined in the Loan
Agreement) shall be due and payable and shall be made by the Borrower to the Agent for the benefit of the Lenders in accordance with the Loan Agreement. Interest payments on such Term Loan shall be computed using the interest rate then in effect
pursuant to the Loan Agreement and based on the outstanding principal balance of the Term Loan. Upon maturity, the outstanding principal balance of the Term Loan shall be immediately due and jointly and severally payable, together with any remaining
accrued interest thereon. 
 All payments on account of indebtedness evidenced by this Term Loan Note shall be first applied to
interest on the unpaid balance and the remainder to principal, unless otherwise specified in the Loan Agreement. Payments of both principal and interest hereunder are to be made in same day or immediately available funds. 

  

  
 This Term Loan Note is
the Term Loan Note referred to in the Loan Agreement, and is subject to all of the terms and conditions of the Loan Agreement, as such Loan Agreement may from time to time be amended, supplemented, or modified, which terms and conditions are hereby
made a part of this Term Loan Note to the same extent and with the same force and effect as if they were fully set forth herein. 
 Upon the occurrence or existence of any Event of Default (as such term is defined in the Loan Agreement), this Note may be accelerated the Agent may take such other actions as may be provided for in the
Loan Agreement, any Financing Agreement (as defined in the Loan Agreement) or otherwise by law. 
 The remedies of the Agent as
provided in this Term Loan Note, in the Loan Agreement, and in any other Financing Agreement shall be cumulative and concurrent, and may be pursued singly, successively, or together against the Borrower, and/or against any collateral or guarantor,
at the sole discretion of the Agent. 
 The Borrower hereby waives presentment for payment, demand, notice of nonpayment, notice
of dishonor, protest of any dishonor, notice of protest, and protest of this Term Loan Note and all other notices in connection with the delivery, acceptance, performance, default, or enforcement of the payment of this Term Loan Note, and agrees
that its liability shall be unconditional without regard to the liability of any other party or person and shall not in any manner be affected by any indulgence, extension of time, renewal, waiver or modification granted or consented to by the
holder hereof; and the Borrower agrees that additional makers, endorsers, guarantors, or sureties may become parties hereto without notice to the Borrower or affecting the Borrower’s liability hereunder. 

It being the intent of the Lender and the Borrower that the rate of interest and all other charges to the Borrower be lawful, if for any
reason the payment of a portion of the interest or other charges otherwise required to be paid under this Term Loan Note would exceed the limit which the Lender may lawfully charge the Borrower, then the obligation to pay interest or other charges
shall automatically be reduced to such limit and, if any amounts in excess of such limit shall have been paid, then such amounts shall at the option of the Lender either be refunded to the Borrower or credited to the principal amount of this Term
Loan Note so that under no circumstances shall the interest or other charges required to be paid by the Borrower hereunder exceed the maximum rate allowed by law. 
 The holder hereof shall not by any act of omission or commission be deemed to waive any of its rights or remedies hereunder unless such waiver be in writing and signed by the holder hereof (and then only
to the extent specifically set forth therein and as permitted by the Loan Agreement). A waiver of any one event shall not be construed as continuing or as a bar to or waiver of such right or remedy on a subsequent event. 

Whenever possible, each provision of this Term Loan Note and the Loan Agreement shall be interpreted in such manner as to be effective
and valid under applicable law, but if any provision of this Term Loan Note or the Loan Agreement shall be prohibited or invalid under such law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provisions of this Term Loan Note or the Loan Agreement. 

  
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 This Term Loan Note
shall not be amended, supplemented or modified except as provided in the Loan Agreement. 
 Without limiting the expansiveness
of any similar provision contained in the Loan Agreement, if at any time or times, Lender: (a) employs counsel in good faith for advice or other representation (i) with respect to this Term Loan Note, the Loan Agreement, any of the other
Financing Agreements or any collateral securing this Term Loan Note, (ii) to represent Lender in any restructuring, workout, litigation, contest, dispute, suit or proceeding or to commence, defend or intervene or to take any other action in or
with respect to any litigation, contest, dispute or proceeding (whether instituted by Lender, Borrower or any other person or entity) in any way or respect relating to this Term Loan Note, the Loan Agreement, any of the other Financing Agreements,
any collateral securing this Term Loan Note or Borrower’s affairs, or (iii) to enforce any rights of Lender against Borrower; (b) takes any action to protect, collect, sell, liquidate or otherwise dispose of any collateral securing
this Term Loan Note; and/or (c) attempts to or enforces any of Lender’s rights and remedies against Borrower; the costs and expenses incurred by Lender in any manner or way with respect to the foregoing shall be part of the indebtedness
evidenced by this Term Loan Note, payable by Borrower to Lender on demand. Without limiting the generality of the foregoing, such expenses and costs include: court costs, reasonable attorneys’ fees and expenses, and accountants’ fees and
expenses. 
 Payment of this Term Loan Note is secured pursuant to the Loan Agreement and certain of the Financing Agreements.

 The Borrower shall use the proceeds represented by this Term Loan Note solely for proper business purposes, and consistently
with all applicable laws and statutes. The Borrower further covenants with the Lender that the Borrower is not in the business of extending credit for the purpose of purchasing or carrying margin security (within the meaning of Regulation U issued
by the Board of Governors of the Federal Reserve System), and no proceeds represented by this Term Loan Note will be used to purchase or carry any margin securities or to extend credit to others for the purpose of purchasing or carrying any margin
securities. 
 This Term Loan Note shall inure to the benefit of Lender and its successors and permitted assigns as provided in
the Loan Agreement and shall be binding upon the Borrower and its successors and permitted assigns. As used herein the term “Lender” shall mean and include the successors and permitted assigns of the identified payee and the holder or
holders of this Term Loan Note from time to time. 
 THIS TERM LOAN NOTE SHALL BE CONSTRUED IN ALL RESPECTS IN ACCORDANCE WITH,
AND ENFORCED AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF ILLINOIS, WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES. 

  
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 THE BORROWER HEREBY
IRREVOCABLY AND UNCONDITIONALLY: 
 SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING
RELATING TO THIS NOTE AND THE OTHER FINANCING AGREEMENTS TO WHICH IT IS A PARTY, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE STATE OF ILLINOIS, THE COURTS OF
THE UNITED STATES OF AMERICA FOR THE NORTHERN DISTRICT OF ILLINOIS AND APPELLATE COURTS FROM ANY THEREOF; 

CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH COURTS AND WAIVES TO THE FULLEST EXTENT PERMITTED BY
LAW IN CONNECTION WITH ANY SUCH ACTION OR PROCEEDING ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES
NOT TO PLEAD OR CLAIM THE SAME; AND 
 THE BORROWER (AND THE LENDER) HEREBY IRREVOCABLY AND KNOWINGLY WAIVE (TO THE FULLEST
EXTENT PERMITTED BY LAW) ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING (INCLUDING, WITHOUT LIMITATION, ANY COUNTERCLAIM) ARISING OUT OF THIS TERM LOAN NOTE, ANY OF THE FINANCING AGREEMENTS OR ANY OTHER AGREEMENTS OR TRANSACTIONS RELATED
HERETO OR THERETO, INCLUDING, WITHOUT LIMITATION, ANY ACTION OR PROCEEDING (A) TO ENFORCE OR DEFEND ANY RIGHTS UNDER OR IN CONNECTION WITH THIS TERM LOAN NOTE OR ANY INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE
DELIVERED IN CONNECTION HEREWITH, OR (B) ARISING FROM ANY DISPUTE OR CONTROVERSY IN CONNECTION WITH OR RELATED TO THIS TERM LOAN NOTE AND THE FINANCING AGREEMENTS. THE LENDER AND THE BORROWER AGREE THAT ANY SUCH ACTION OR PROCEEDING SHALL BE
TRIED BEFORE A COURT AND NOT A JURY. 
 [Signature Page Follows] 

  
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 IN WITNESS
WHEREOF, the Borrower has caused this Term Loan Note to be duly executed by its authorized officer as of the date first above written. 
  

			
	PHOENIX FOOTWEAR GROUP, INC.
		
	By:	 	/s/ James Riedman
		 	Name: James Riedman
		 	Its: Chief Executive Officer
	
	H.S. TRASK & CO.
		
	By:	 	/s/ James Riedman
		 	Name: James Riedman
		 	Its: Chief Executive Officer
	
	PENOBSCOT SHOE COMPANY
		
	By:	 	/s/ James Riedman
		 	Name: James Riedman
		 	Its: Chief Executive Officer

 Term
Loan NotePledge Agreement

  
 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

  

 
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. 

  
 7 

  
 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. 

  
 8 

  
 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. 

  
 9 

  
 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. 

  
 10 

  
 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

  
 11 

 
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, 

  
 12 

 
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 

  
 13 

 
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.] 

  
 14 

  
 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

  
 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

  
 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

  
 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

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