Exhibit 10.4


 


 


 


 


 


 


PLEDGE AGREEMENT
MADE BY


MANHATTAN BRIDGE
CAPITAL, INC. TO


WORLDWIDE STOCK TRANSFER,
LLC AS INDENTURE TRUSTEE


 


DATED AS OF APRIL
25, 2016


 


 


 


 


 


 




     

     

    

 


Table of Contents


 


Page


 


	ARTICLE I.	DEFINITIONS	1
	 	 	 
	Section 1.1	Defined Terms	1
	Section 1.2	Other Definitional Provisions	2
	Section 1.3	Other Terms	2
	Section 1.4	Computation of Time Periods	2
	 	 	 
	ARTICLE II.	PLEDGE	2
	 	 	 
	Section 2.1	Pledge	2
	 	 	 
	ARTICLE III.	DELIVERY OF COLLATERAL	3
	 	 	 
	Section 3.1	Delivery of Collateral	3
	Section 3.2	Recording of Encumbrance	3
	Section 3.3	Equity Interests	3
	 	 	 
	ARTICLE IV.	REPRESENTATIONS AND WARRANTIES	4
	 	 	 
	Section 4.1	Representations and Warranties	4
	 	 	 
	ARTICLE V.	SUPPLEMENTS; FURTHER ASSURANCES	6
	 	 	 
	Section 5.1	Supplements	6
	Section 5.2	Further Assurances	6
	 	 	 
	ARTICLE VI.	COVENANTS	6
	 	 	 
	Section 6.1	No Encumbrances	6
	Section 6.2	Notices	6
	Section 6.3	Dividend/Distribution Rights/Voting Power	6
	Section 6.4	Equity Interests	7
	Section 6.5	Legal Subsistence	7
	Section 6.6	Compliance with Laws	7
	Section 6.7	Taxes	7
	Section 6.8	Modifications	7
	 	 	 
	ARTICLE VII.	SECURED PARTY APPOINTED ATTORNEY-IN-FACT	7
	 	 	 
	Section 7.1	Secured Party Appointed Attorney-In-Fact	7
	 	 	 
	ARTICLE VIII.	REASONABLE CARE	8
	 	 	 
	Section 8.1	Reasonable Care	8
	 	 	 
	ARTICLE IX.	NO LIABILITY	8
	 	 	 
	Section 9.1	No Liability	8
	 	 	 
	ARTICLE X.	REMEDIES UPON EVENT OF DEFAULT	8
	 	 	 
	Section 10.1	Remedies Upon Event of Default	8
	 	 	 
	ARTICLE XI.	EXPENSES	10
	 	 	 
	Section 11.1	Expenses	10
	 	 	 
	ARTICLE XII.	NO WAIVER	10


 




     

     

    

 


Table of Contents
(cont.)


Page


 


	Section
    12.1	No Waiver	10
	 	 	 
	ARTICLE XIII.	AMENDMENTS	10
	 	 	 
	Section 13.1	Amendments	10
	 	 	 
	ARTICLE XIV.	RELEASE; TERMINATION	10
	 	 	 
	Section 14.1	Release; Termination	10
	 	 	 
	ARTICLE XV.	NOTICES	11
	 	 	 
	Section 15.1	Notices	11
	 	 	 
	ARTICLE XVI.	CONTINUING SECURITY INTEREST	11
	 	 	 
	Section 16.1	Continuing Security Interest	11
	 	 	 
	ARTICLE XVII. 	SECURITY INTEREST ABSOLUTE	11
	 	 	 
	Section 17.1	Security Interest Absolute	11
	 	 	 
	ARTICLE XVIII. 	INDEMNITY	12
	 	 	 
	Section 18.1	Indemnity	12
	 	 	 
	ARTICLE XIX.	OBLIGATIONS SECURED BY COLLATERAL	12
	 	 	 
	Section 19.1	Obligations Secured by Collateral	12
	 	 	 
	ARTICLE XX.	SEVERABILITY	12
	 	 	 
	Section 20.1	Severability	12
	 	 	 
	ARTICLE XXI.	COUNTERPARTS; EFFECTIVENESS	12
	 	 	 
	Section 21.1	Counterparts; Effectiveness	12
	 	 	 
	ARTICLE XXII. 	REINSTATEMENT	13
	 	 	 
	Section 22.1	Reinstatement	13
	 	 	 
	ARTICLE XXIII.	SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL	13
			 
	Section 23.1	SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL	13
	 	 	 
	ARTICLE XXIV. 	GOVERNING LAW	14
	 	 	 
	Section 24.1	GOVERNING LAW	14


 




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PLEDGE AGREEMENT


 


This PLEDGE AGREEMENT (this
“Agreement”), dated as of April 25, 2016, is made by MANHATTAN BRIDGE CAPITAL, INC., a New York corporation
(“MBC”), to WORLDWIDE STOCK TRANSFER, LLC, as Indenture Trustee under the Indenture hereinafter described (the
“Secured Party”), as grantee hereunder.


 


W I T N E S S E T H :


 


WHEREAS,
pursuant to that certain Indenture, dated as of April 25, 2016 (as amended, restated, supplemented or otherwise modified from time
to time, the “Indenture”), among MBC Funding II Corp, a New York corporation (the “Issuer”),
MBC and the Secured Party, the Issuer is issuing its 6% Senior Secured Notes due April 2026 (the “Notes”); and


 


WHEREAS, as a condition precedent
to the issuance of the Notes, MBC is executing and delivering that certain Continuing Guarantee, dated as of April 25, 2016 (as
amended, restated, supplemented or otherwise modified from time to time, the “Guarantee”) to the Trustee, for
the benefit of itself, the Secured Party and the Noteholders; and


 


WHEREAS, as a condition precedent
to the issuance of the Notes, MBC is required to execute and deliver this Agreement to the Secured Party to secure MBC’s
obligations under the Guarantee; and


 


WHEREAS,
MBC will derive a financial benefit from the issuance of the Notes by the Issuer, such that it is and will be in MBC’s interest
and to its financial benefit to enter into this Agreement.


 


NOW, THEREFORE, in consideration
of the foregoing premises and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged,
MBC hereby covenants and agrees with the Secured Party as follows:


 


ARTICLE
I.

 DEFINITIONS


 


Section 1.1           Defined Terms.
Unless otherwise defined herein, terms defined in the Indenture and used herein shall have the meanings given to them in the Indenture,
except that the following terms shall have the specified meanings:


 


“Agreement” has
the meaning set forth in the preamble hereto.


 


“Collateral” has
the meaning set forth in Section 2.1.


 


“MBC” has the
meaning set forth in the preamble of this Agreement.


 


“Equity Interests”
means shares of capital stock or other equity ownership interests in a Person, and any warrants, options or other rights entitling
the holder thereof to purchase or acquire any such equity interest, but excluding debt securities convertible or exchangeable into
any such equity interest.


 




     

     

    

 


“Indemnitee”
has the meaning set forth in Section 18.1.


 


“Indenture”
has the meaning set forth in the recitals to this Agreement.


 


“Issuer”
has the meaning set forth in the recitals to this Agreement.


 


“Notes” has
the meaning set forth in the recitals to this Agreement.


 


“Pledged Equity”
has the meaning set forth in Section 2.1(a).


 


“Secured Obligations”
has the meaning set forth in Section 2.1.


 


“Secured Party”
has the meaning set forth in the preamble of this Agreement.


 


“Voting Notice”
has the meaning set forth in Section 6.3.


 


Section 1.2           Other Definitional
Provisions.


 


(a)           Each term defined in
the singular form in Section 1.1 or elsewhere in this Agreement shall mean the plural thereof when the plural form of such term
is used in this Agreement or any certificate, report or other document made or delivered pursuant hereto, and each term defined
in the plural form in Section 1.1 or elsewhere in this Agreement shall mean the singular thereof when the singular form of such
term is used herein or therein. Words of the masculine, feminine or neuter gender shall mean and include the correlative words
of other genders.


 


(b)           The words “hereof,
“herein”, “hereunder” and similar terms when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Article and Section references herein are references to Articles
and Sections to this Agreement unless otherwise specified.


 


(c)           The terms “include”,
“including” and similar terms shall be construed as if followed by the phrase “without limitation”.


 


Section 1.3           Other Terms.
Unless otherwise defined herein or in the Indenture, or unless the context otherwise requires, all terms used herein that are defined
in the UCC shall have the meanings therein stated.


 


Section 1.4           Computation
of Time Periods. Unless otherwise stated in this Agreement, in the computation of a period of time from a specified date to
a later specified date, the word “from” means “from and including” and each of the words “to”
and “until” means “to but excluding”.


 


ARTICLE
II.

 PLEDGE


 


Section 2.1           Pledge. As
security for the payment and performance when due of the obligations of MBC under the Guarantee (the “Secured
Obligations”), MBC hereby pledges, grants, assigns, hypothecates, transfers and delivers to the Secured Party, for
the benefit of itself and the Noteholders, a continuing first priority security interest in all of MBC’s right, title
and interest in, to and under the following property, whether now owned or hereafter acquired (the
“Collateral”):


 


(a)           all of MBC’s
Equity Interests in the Issuer, whether now owned or acquired in the future (the “Pledged Equity”);


 






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(b)           all certificates,
agreements or other instruments, if any, representing the Pledged Equity;


 


(c)           all dividends, cash,
instruments and other property from time to time received, receivable or otherwise distributed in respect of or in exchange for
all or any part of the Pledged Equity; and


 


(d)           all proceeds of any
of the foregoing (including, without limitation, proceeds constituting any property of the types described above).


 


ARTICLE III.

 DELIVERY
OF COLLATERAL


 


Section 3.1           Delivery
of Collateral. Contemporaneously with the execution of this Agreement, MBC shall deliver or cause to be delivered to the Secured
Party, to the extent not previously delivered, (a) any and all certificates and other instruments evidencing the Pledged Equity
then held in the form of certificates or other instruments by MBC, together with undated stock powers or assignments of such certificates
duly executed and signed in blank, (b) any and all certificates or other instruments or documents representing any of the Collateral
then held by MBC and (c) all other property comprising part of the Collateral then held in the form of certificates or other instruments
by MBC with proper instruments of assignment duly executed and such other instruments or documents as the Secured Party may reasonably
request to effect the purposes contemplated hereby.


 


Section 3.2           Recording
of Encumbrance. MBC shall record the security interest of the Secured Party on its records at its principal office within two
(2) Business Days after the date hereof and provide to the Secured Party written confirmation that such security interest has been
recorded and that there are no other liens, security interests or other encumbrances on its records with respect to the Collateral.


 


Section 3.3           Equity Interests.
If MBC shall become entitled to receive or shall receive, in respect of the Pledged Equity, any Equity Interests, options, warrants,
rights or other similar property, including, without limitation, any certificate representing any distribution in connection with
any recapitalization, reclassification or increase or reduction of capital (whether as an addition to, in substitution of or in
exchange for such Pledged Equity or otherwise), MBC agrees:


 


(a)           to accept the same as the
agent of the Secured Party;


 


(b)           to hold the same in
trust on behalf of and for the benefit of the Secured Party; and


 




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(c)           to deliver any and
all certificates or instruments evidencing the same to the Secured Party on or before the close of business on the second (2nd)
Business Day following the receipt thereof by MBC, in the exact form received, with undated stock powers or assignment of such
certificate or instruments duly executed in blank, to be held by the Secured Party, subject to the terms of this Agreement, as
additional Collateral.


 


ARTICLE IV.

 REPRESENTATIONS
AND WARRANTIES


 


Section 4.1           Representations
and Warranties. MBC represents and warrants as follows:


 


(a)           MBC is a corporation
duly created and validly existing in good standing under the laws of the State of New York and has full power, authority and legal
right to execute and deliver this Agreement and the other Transaction Documents to which MBC is a party, and to perform its obligations
hereunder and thereunder.


 


(b)           The execution and delivery
by MBC of this Agreement and the other Transaction Documents to which MBC is a party, and the performance by MBC of its obligations
hereunder and thereunder, has been duly and validly authorized and will not violate the organizational documents of MBC, nor will
such execution, delivery or performance require the authorization, consent or approval of, the giving of notice to, the filing
or registration with, or the taking of any other action by, any arbitrator, court or other Governmental Authority (other than the
SEC) or conflict with, or result in a breach or violation of, any provision of any law or regulation governing MBC or any order,
writ, judgment or decree of any arbitrator, court or other Governmental Authority applicable to MBC or any of its assets, any indenture,
mortgage, deed of trust, partnership agreement or other agreement or instrument to which MBC is a party or by which MBC or all
or any portion of its assets is bound, which breach or violation would materially adversely affect either the ability of MBC to
perform its obligations under this Agreement and such other Transaction Documents or the financial condition of MBC.


 


(c)           This Agreement and
the other Transaction Documents have been duly executed and delivered by MBC and constitute valid, legal and binding obligations
of MBC, enforceable against MBC in accordance with the terms hereof, subject to (i) applicable bankruptcy, insolvency, reorganization,
moratorium and other laws affecting the enforcement of creditors’ rights generally and (ii) general principles of equity,
regardless of whether such enforcement is considered in a proceeding in equity or at law.


 


(d)           MBC is not: (i) an
“investment company” or a company “controlled” by an “investment company,” within the meaning
of the 1940 Act; (ii) a “holding company” or a “subsidiary company” of a “holding company”
or an “affiliate” of either a “holding company” or a “subsidiary company” within the meaning
of the Public Utility Holding Company Act of 1935, as amended; or (iii) subject to any other federal or state law or regulation
which prevents MBC from entering into this Agreement.


 


(e)           There are no
Proceedings at law or in equity or by or before any government authority, arbitral tribunal or other body now pending against
MBC or, to the best knowledge of MBC, threatened against MBC which questions the validity or legality of or seeks damages in
connection with this Agreement or the other Transaction Documents to which MBC is a party or which seeks to prevent the
consummation of any of the transactions contemplated by this Agreement or such other Transaction Documents.


 






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(f)           It is in MBC’s
direct interest to assist the Issuer in issuing the Notes because MBC has a direct investment in or business relationship with
the Issuer.


 


(g)           The Pledged Equity is
validly issued, fully paid for and non-assessable and is registered in the name of MBC.


 


(h)           MBC is pledging hereunder
all of MBC’s interest and ownership in the Issuer and Issuer has not issued any of other equity securities or any debt securities
convertible into equity securities in the Issuer. MBC is the sole legal and beneficial owner of the Collateral free and clear of
any liens, security interests or other encumbrances, other than the security interest created pursuant to this Agreement. No security
agreement, financing statement or other public notice with respect to all or any part of the Collateral is on file or of record
in any public office, except such as may have been filed in favor of the Secured Party pursuant to this Agreement.


 


(i)           No consent of
any other party (including, without limitation, shareholders, directors or creditors of MBC) and no government approval is
required which has not been obtained (i) for the pledge by MBC of the Collateral pursuant to this Agreement or (ii) for the
exercise by the Secured Party of the rights provided for in this Agreement or the remedies in respect of the Collateral
pursuant to this Agreement (except as may be required (1) in connection with any disposition of all or any part of the
Collateral under any laws affecting the offering and sale of securities generally, and (2) under applicable federal and state
laws, rules and regulations and applicable interpretations thereof providing for the supervision or regulation of the banking
or trust businesses generally and applicable to the Secured Party.


 


(j)           The execution
and delivery of this Agreement concurrently with the delivery to the Secured Party of the certificates and other items
contemplated by Section 3.1 and the taking of the actions described in Section 3.3 constitute “control” of the
Pledged Equity described in Section 8-106(b) of the UCC and create a valid security interest in the Collateral securing the
Secured Obligations, and MBC has done such other acts, if any, reasonably requested by the Secured Party to perfect the
security interest in the Collateral granted hereunder.


 


(k)           MBC has not sold,
transferred, pledged or granted any option or security interest in or otherwise hypothecated the Collateral in any manner
whatsoever, except for the security interest granted to the Secured Party hereby; the Collateral is pledged hereby free and
clear of any liens, security interests, encumbrances, claims, attachments, pledges, restrictions, legends, and options of
every kind, nature and description and whether voluntary or involuntary; and, so long as any portion of the Obligations
remain unpaid, MBC will not sell, transfer, pledge or grant any lien, security interest, encumbrances or option in or with
respect to the Collateral or otherwise create or permit to exist any lien upon or with respect to the Collateral without the
consent of the Secured Party and will do all other acts which may be reasonably necessary to protect the Collateral against
the rights, claims, liens or other security interests of third persons.


 






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ARTICLE V.

 SUPPLEMENTS;
FURTHER ASSURANCES


 


Section 5.1           Supplements.
MBC agrees that, at any time and from time to time, at MBC’s expense and upon the Secured Party’s reasonable request,
MBC will promptly execute and deliver all further instruments and documents, and take all further action, that may be necessary
or desirable in the reasonable discretion of the Secured Party, in order to perfect the security interest in the Collateral and
to carry out the provisions of this Agreement or to enable the Secured Party to exercise and enforce its rights and remedies hereunder
with respect to any Collateral.


 


Section 5.2           Further
Assurances. If MBC fails to perform any agreement contained herein after receipt of a written request to do so from the Secured
Party, the Secured Party may itself perform, or cause performance of, such agreement, in which case the reasonable expenses of
the Secured Party, including the fees and expenses of its counsel, incurred in connection therewith shall be payable by MBC under
Section 11.1.


 


ARTICLE
VI.

 COVENANTS


 


Section 6.1           No Encumbrances.
MBC shall not (a) sell or otherwise dispose of the Collateral or any interest therein or (b) enter into, create, incur, assume,
suffer or permit to exist any lien, security interest or other encumbrance on or with respect to the Collateral, now owned or hereafter
acquired or any interest therein or any income or profits therefrom, or file or permit the filing of, or permit to remain in effect
any financing statement or other similar notice of any lien, security interest or other encumbrance with respect to the Collateral


 


Section 6.2           Notices.
MBC shall promptly give the Secured Party copies of all notices and other communications received by MBC with respect to any Collateral
registered in the name of MBC.


 


Section
6.3           Dividend/Distribution Rights/Voting Power. Unless and until an Event of Default shall have occurred, MBC shall
be entitled to receive all dividends and/or distributions paid on the Pledged Equity and to exercise all voting powers in all
organizational matters pertaining to the Collateral for any purpose not inconsistent with, or in violation of, the provisions
of the Indenture or the other Transaction Documents. Notwithstanding the foregoing, upon the occurrence and during the
continuance of an Event of Default, the Secured Party may, in its sole discretion, deliver to MBC a written notice (such
notice, a “Voting Notice”), whereupon the Secured Party shall have the sole and exclusive right to
exercise all voting rights with respect to the Collateral, and MBC shall take all such steps as may be necessary to
effectuate such rights until the Secured Party notifies MBC in writing of the revocation of such Voting Notice. Upon the
delivery of a Voting Notice to MBC and until such time, if any, as such Voting Notice is revoked, MBC shall have no further
rights to and shall not exercise voting powers or other ownership and/or management rights with respect to the Collateral and
all such rights shall be thereafter exercisable only by the Secured Party (regardless of whether the Secured Party shall have
taken title to the Collateral and/or otherwise exercised any of its rights and remedies with respect to the Collateral and
even prior to any such exercise).


 






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Section 6.4           Equity Interests.
MBC agrees that it will not accept any Equity Interests or other equity ownership interests, any rights or options to acquire any
Equity Interests or other equity ownership interests or other securities, each in addition to or in substitution for the Collateral,
without prior written consent of the Secured Party.


 


Section 6.5           Legal Subsistence.
MBC shall preserve and maintain (a) its legal subsistence as a corporation in good standing under the laws of the State of New
York and (b) its qualification to do business in every jurisdiction where the ownership of its properties and the nature of its
business require them to be so qualified and where the failure to be so qualified would have a material adverse effect on the security
interest created by this Agreement.


 


Section 6.6           Compliance
with Laws. MBC shall comply in all material respects with all laws, and obtain, maintain and comply with all government approvals
as shall now or hereafter be necessary under applicable law, rule, or regulation, in each case, in connection with the making and
performance by MBC of any provision of this Agreement.


 


Section 6.7           Taxes.
MBC shall pay and discharge all taxes, assessments and governmental charges or levies imposed on it or on its incomes or profits
or on any of its properties prior to the date on which penalties attach thereto, and all lawful claims that, if unpaid, could reasonably
be expected to become a lien or other encumbrance upon the Collateral, unless such matters are being challenged by MBC in good
faith. MBC will promptly pay or cause to be paid any valid, final judgment enforcing any such tax, assessment, charge, levy or
claim and cause the same to be satisfied of record.


 


Section 6.8           Modifications.
MBC shall not, without the prior written consent of the Secured Party, agree to or permit any amendment, supplement or modification
of, or waiver with respect to, any of the provisions of any of the organizational documents of the Issuer, if any such amendment,
supplement, modification or waiver would result in a material adverse change in the value of the Collateral or the rights of the
Secured Party.


 


ARTICLE
VII.


SECURED
PARTY APPOINTED ATTORNEY-IN-FACT


 


Section 7.1           Secured
Party Appointed Attorney-In-Fact. MBC hereby appoints the Secured Party, or any Person (including any officer or agent)
whom the Secured Party may designate, as MBC’s true and lawful attorney-in-fact, with full irrevocable power and
authority in the place and stead of MBC and in the name of MBC or in its own name, at MBC’s cost and expense, from time
to time in the Secured Party’s reasonable discretion to take any action and to execute any instrument which the Secured
Party may reasonably deem necessary or advisable to enforce its rights under this Agreement, including, without limitation,
authority to receive, endorse and collect all instruments made payable to MBC representing any distribution, interest payment
or other payment in respect of the Collateral or any part thereof and to give full discharge for the same; provided, however,
that the Secured Party will not exercise its powers under this Section 7.1 unless an Event of Default has occurred and is
continuing and unless so instructed pursuant to the Indenture.


 






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ARTICLE
VIII.

 REASONABLE CARE


 


Section 8.1           Reasonable
Care. The Secured Party shall be deemed to have exercised reasonable care in the custody and preservation of the Collateral
in its possession if the Collateral is accorded treatment substantially equivalent to that which the Secured Party accords its
own property of the type of which the Collateral consists, it being understood that the Secured Party shall have no responsibility
for (a) ascertaining or taking action with respect to calls, conversions, exchanges, maturities, tenders or other matters relative
to any Collateral, whether or not the Secured Party has or is deemed to have knowledge of such matters, or (b) taking any necessary
steps to preserve rights against any parties with respect to any Collateral absent its gross negligence or willful misconduct.


 


ARTICLE IX.


NO LIABILITY


 


Section 9.1           No Liability.
Neither the Secured Party nor any of its directors, officers, employees or agents shall be deemed to have assumed any of the liabilities
or obligations of MBC as a result of the pledge and security interest granted under or pursuant to this Agreement. In the absence
of gross negligence or willful misconduct, the Secured Party or any of its directors, officers, employees or agents shall not be
liable for any failure to collect or realize upon the Secured Obligations or any collateral security or guarantee therefor, or
any part thereof, or for any delay in so doing nor shall it be under any obligation to take any action whatsoever with regard thereto.


 


ARTICLE X.


REMEDIES UPON
EVENT OF DEFAULT


 


Section 10.1           Remedies
Upon Event of Default. If an Event of Default shall have occurred and be continuing:


 


(a)           The Secured Party may
exercise the power of attorney described in Section 7.1 with respect to the Collateral and any of the certificates or other instruments
delivered pursuant to Section 3.1.


 






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(b)           The Secured
Party may exercise in respect of the Collateral, in addition to other rights and remedies provided for herein or otherwise
available to it, all the rights and remedies of a secured party on default under the UCC then in effect in any applicable
jurisdiction, and the Secured Party may also in its sole discretion, without notice except as specified below or except as
required by mandatory provisions of law, sell the Collateral or any part thereof in one or more parcels at public or private
sale or at any of the Secured Party’s offices or elsewhere, for cash, on credit or for future delivery, and at such
price or prices and upon such other terms as the Secured Party may reasonably deem commercially reasonable, irrespective of
the impact of any such sales on the market price of the Collateral at any such sale. Each purchaser at any such sale shall
hold the property, sold absolutely, free from any claim or right on the part of MBC, and MBC hereby waives (to the extent
permitted by law) all rights of redemption, stay and/or appraisal which it now has or may at any time in the future have
under any rule of law or statute now existing or hereafter enacted. MBC agrees that, to the extent notice of sale shall be
required by law, at least ten (10) Business Days’ notice to MBC of the time and place of any public sale or the time
after which any private sale is to be made shall constitute reasonable notification. The Secured Party shall not be obligated
to make any sale of Collateral regardless of notice of sale having been given. The Secured Party 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. The Secured Party shall incur no liability as a result of
the sale of the Collateral, or any part thereof, at any public or private sale. MBC hereby waives any claims against the
Secured Party arising by reason of the fact that the price at which any Collateral may have been sold at such a private sale
was less than the price which might have been obtained at a public sale, even if the Secured Party accepts the first offer
received and does not offer such Collateral to more than one offeree.


 


(c)           MBC recognizes that
the Secured Party may elect in its sole discretion to sell all or a part of the Collateral to one or more purchasers in privately
negotiated transactions in which the purchasers will be obligated to agree, among other things, to acquire the Collateral for their
own account, for investment and not with a view to the distribution or resale thereof. MBC acknowledges that any such private sales
may be at prices and on terms less favorable than those obtainable through a public sale (including, without limitation, a public
offering made pursuant to a registration statement under the 1933 Act), and MBC and the Secured Party agree that the Secured Party
has no obligation to engage in public sales or to delay the sale of any Collateral to permit the issuer thereof to register the
Collateral in connection with a public sale requiring registration under the 1933 Act.


 


(d)           Any cash held by the
Secured Party as Collateral and all cash proceeds received by the Secured Party in respect of any sale of, collection from or other
realization upon all or any part of the Collateral shall, as soon as reasonably practicable, be applied (after payment of any amounts
payable to the Secured Party pursuant to Section 11.1) by the Secured Party, first, to the payment of the costs and expenses
of such sale, collection or other realization, if any, including reasonable out-of-pocket costs and expenses of the Secured Party
(including the reasonable fees and out-of-pocket expenses of its counsel), and all reasonable expenses, liabilities and advances
made or incurred by the Secured Party in connection therewith, second, to the payment of the Secured Obligations in accordance
with the terms of the Indenture and, third, all remaining amounts shall promptly be paid to MBC or its successors or assigns.


 




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ARTICLE XI.

 EXPENSES


 


Section 11.1           Expenses.
MBC will upon demand pay to the Secured Party the amount of any and all reasonable expenses, including the reasonable fees and
expenses of its counsel and of any experts and the Secured Party, and any transfer taxes, in each case payable upon sale of the
Collateral, which the Secured Party may incur in connection with (a) the custody or preservation of, or the sale of, collection
from or other realization upon, any of the Collateral pursuant to the exercise or enforcement of any of the rights of the Secured
Party hereunder or (b) the failure by MBC to perform or observe any of the provisions hereof. Any amount payable by MBC pursuant
to this Section 11.1 shall be payable upon demand and shall constitute Secured Obligations secured hereby.


 


ARTICLE
XII.

 NO WAIVER


 


Section 12.1           No Waiver.
No failure or delay on the part of the Secured Party to exercise, and no course of dealing with respect to, and no delay in exercising,
any right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise by the Secured
Party of any right, power or remedy preclude any additional exercise by the Secured Party of such right, power or remedy. The remedies
herein provided are to the fullest extent permitted by law cumulative and are not exclusive of any remedies provided by law. No
notice to or demand on MBC in any case shall entitle MBC to any other or further notice or demand in similar or other circumstances.


 


ARTICLE
XIII.

 AMENDMENTS


 


Section 13.1           Amendments.
No waiver, amendment, modification or termination of any provision of this Agreement, or consent to any departure by MBC therefrom,
shall in any event be effective without the written concurrence of the Secured Party, and none of the Collateral shall be released
without the written consent of the Secured Party. Any such waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given.


 


ARTICLE XIV.

 RELEASE;
TERMINATION


 


Section 14.1           Release;
Termination. Upon payment and performance in full of the Secured Obligations, this Agreement shall terminate, and the Secured
Party (a) shall promptly deliver to MBC any remaining Collateral and money received in respect thereof, and all documents, agreements
or instruments representing the Collateral held by the Secured Party prior to such termination, and (b) upon request by MBC, shall
promptly deliver to MBC and file or record, at MBC’s expense, all such documentation (including UCC termination statements)
necessary to release the liens on the Collateral, such documentation to be prepared by MBC and delivered to the Secured Party.
If the Secured Party fails to promptly deliver or file or record the UCC termination statements referred to in, and in accordance
with, clause (b) in the immediately preceding sentence, then MBC may file or record such UCC termination statements.


 




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ARTICLE
XV.

 NOTICES


 


Section 15.1           Notices.
Any communication provided for or permitted hereunder shall be in writing and, unless otherwise expressly provided herein, shall
be deemed to have been duly given if delivered by courier or mailed by first class mail, postage prepaid, or if transmitted by
facsimile and confirmed in a writing delivered or mailed as aforesaid, to: (a) in the case of MBC, Manhattan Bridge Capital, Inc.,
60 Cutter Mill Road, Suite 205, Great Neck, New York 11021, Attention: Assaf Ran and (b) in the case of Secured Party, Worldwide
Stock Transfer, LLC, One University Plaza, Suite 505, Hackensack, New Jersey 07601, Attention: Jonathan Gellis, facsimile number:
(201) 755-2597; or at such other address as may be substituted by notice given as herein provided.


 


ARTICLE XVI.

 CONTINUING
SECURITY INTEREST


 


Section 16.1           Continuing
Security Interest. This Agreement shall create a continuing lien and security interest in the Collateral until the release
thereof pursuant to Section 14.1. This Agreement shall accrued to the benefit of an successor Indenture Trustee appointed as such
in accordance with the Indenture, and such other Person shall thereupon become vested with all the benefits in respect thereof
granted to the Secured Party herein or otherwise.


 


ARTICLE XVII.

 SECURITY
INTEREST ABSOLUTE


 


Section 17.1           Security
Interest Absolute. All rights of the Secured Party and security interests hereunder, and all obligations of MBC hereunder,
shall be absolute and unconditional irrespective of:


 


(a)           any lack of validity or
enforceability of any of the Transaction Documents or any other agreement or instrument relating thereto;


 


(b)           any change in the time,
manner or place of payment of, or in any other term of, all or any of the Secured Obligations, or any other amendment or waiver
of or any consent to any departure from the Transaction Documents or any other agreement or instrument relating thereto;


 


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


 


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


 




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ARTICLE
XVIII.

 INDEMNITY


 


Section 18.1           Indemnity.
MBC agrees to indemnify, reimburse and hold the Secured Party and its officers, directors, employees and agents (each, an “Indemnitee”
and, collectively, the “Indemnitees”) harmless from any and all liabilities, obligations, damages, injuries,
penalties, claims, demands, actions, suits, judgments and any and all costs and expenses (including attorneys’ fees and disbursements)
of whatsoever kind and nature imposed on, asserted against or incurred by any of the Indemnitees in connection with (a) the custody
or preservation of, or the sale of, collection from or other realization upon, any of the Collateral pursuant to the exercise or
enforcement of any of the rights of the Secured Party hereunder or (b) the failure by MBC to perform or observe any of the provisions
hereof, excluding those arising out of the gross negligence or willful misconduct of any Indemnitee. Each Indemnitee agrees to
use its best efforts to promptly notify MBC of any assertion of any such liability, damage, injury, penalty, claim, demand, action,
judgment or suit of which such Indemnitee has knowledge.


 


ARTICLE XIX.

 OBLIGATIONS
SECURED BY COLLATERAL


 


Section 19.1           Obligations
Secured by Collateral. Any amounts paid by any Indemnitee as to which such Indemnitee has the right to reimbursement, and any
amounts paid by the Secured Party in preservation of any of its rights or interest in the Collateral, shall constitute Secured
Obligations secured by the Collateral.


 


ARTICLE
XX.

 SEVERABILITY


 


Section 20.1           Severability.
Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition
or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
Where provisions of any law or regulation resulting in such prohibition or unenforceability may be waived, they are hereby waived
by the parties hereto to the full extent permitted by law so that this Agreement shall be deemed a valid, binding agreement in
accordance with its terms.


 


ARTICLE XXI.

 COUNTERPARTS;
EFFECTIVENESS


 


Section 21.1           Counterparts;
Effectiveness. This Agreement and any amendments, waivers, consents or supplements may be executed in counterparts, each of
which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and
the same instrument. This Agreement shall become effective upon the execution and delivery of a counterpart hereof by each of the
parties hereto.


 




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ARTICLE
XXII.

 REINSTATEMENT


 


Section 22.1           Reinstatement.
This Agreement shall continue to be effective or be reinstated, as the case may be, if at any time any amount received by the Secured
Party hereunder or pursuant hereto is rescinded or must otherwise be restored or returned by the Secured Party, as the case may
be, upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of MBC or upon the appointment of any intervenor
or conservator of, or trustee or similar official for, MBC or any substantial part of its assets, or upon the entry of an order
by a bankruptcy court avoiding the payment of such amount, or otherwise, all as though such payments had not been made.


 


ARTICLE XXIII. 


SUBMISSION TO JURISDICTION;
WAIVER OF JURY TRIAL


 


Section 23.1           SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL.


 


(a)           ANY LEGAL ACTION OR
PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO MAY BE BROUGHT IN THE COURTS OF THE BOROUGH OF MANHATTAN,
THE CITY OF NEW YORK OR OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND EACH OF MBC AND SECURED PARTY
HEREBY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF THE
AFORESAID COURTS. EACH OF MBC AND THE SECURED PARTY HEREBY IRREVOCABLY WAIVE TRIAL BY JURY AND ANY OBJECTION, INCLUDING, WITHOUT
LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS.


 


(b)           EACH OF MBC AND SECURED
PARTY IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE
SENDING OF COPIES THEREOF BY FEDERAL EXPRESS OR OTHER OVERNIGHT COURIER COMPANY, TO MBC AT ITS ADDRESS SPECIFIED BY SECTION 15.1,
SUCH SERVICE TO BECOME EFFECTIVE FOUR DAYS AFTER DELIVERY TO SUCH COURIER COMPANY.


 


(c)           NOTHING HEREIN SHALL
AFFECT THE RIGHT OF THE SECURED PARTY TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR
OTHERWISE PROCEED AGAINST MBC IN ANY OTHER JURISDICTION.


 




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ARTICLE
XXIV.

 GOVERNING LAW


  


Section 24.1           GOVERNING
LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL SUBSTANTIVE LAWS OF THE STATE OF NEW
YORK WITHOUT REFERENCE TO THE RULES THEREOF RELATING TO CONFLICTS OF LAW OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW
OF THE STATE OF NEW YORK, AND THE OBLIGATIONS, RIGHTS AND REMEDIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS,
EXCEPT TO THE EXTENT THE VALIDITY OR PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR THE REMEDIES HEREUNDER, ARE GOVERNED BY
THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF NEW YORK.


 


[SIGNATURE PAGE FOLLOWS]


 


 




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IN WITNESS WHEREOF, MBC and the
Secured Party have caused this Agreement to be duly executed and delivered by their officers
thereunto duly authorized as of the date first above written.


 


	 	MANHATTAN BRIDGE CAPITAL, INC.
	 	 	 
	 	 	 
	 	By:	/s/ Assaf Ran	 
	 	 	Assaf Ran
	 	 	Chief Executive Officer
	 	 	 
	 	 	 
	 	WORLDWIDE STOCK TRANSFER, LLC,
	 	not in its individual capacity but solely as Indenture Trustee
	 	 	 
	 	 	 
	 	By:	/s/ Yonah J. Kopstick	 
	 	 	Name: Yonah J. Kopstick
	 	 	Title: SVP


 


 


 


 


 


 


 


 


 


 


 


 





Signature Page to the Pledge Agreement