Exhibit
10.5


 


PLEDGE, ASSIGNMENT AND SECURITY
AGREEMENT


 


THIS PLEDGE, ASSIGNMENT AND SECURITY AGREEMENT (this “Agreement”)
is made this 30th day of April, 2010, by LIQUIDITY SERVICES, INC., a
corporation organized under the laws of the State of Delaware (the “Borrower”),
in favor of BANK OF AMERICA, N.A., a national banking association, its
successors and assigns (the “Lender”).


 


RECITALS


 


A.            Borrower has applied to the Lender for a revolving
credit facility in the maximum principal amount of Thirty Million Dollars
($30,000,000) and, as part of that revolving credit facility, a letter of
credit facility in the maximum principal amount of Ten Million Dollars
($10,000,000) (collectively, the “Credit Facilities”), which is to be advanced
pursuant to the terms of a Financing and Security Agreement of even date
herewith by and between the Borrower and the Lender (as amended, modified,
restated, substituted, extended and renewed at any time and from time to time,
the “Financing Agreement”).


 


B.            As a condition precedent to making
advances under the Credit Facilities, the Lender required that Borrower, secure
the payment and performance of all of the Obligations by the execution of this
Agreement.


 


C.            All defined terms used in this Agreement
and not defined in this Agreement shall have the meaning given to such terms in
the Financing Agreement.  As used in this
Agreement, the singular number shall include the plural, the plural the
singular and the use of the masculine, feminine or neuter gender shall include
all genders, as the context may require.


 


AGREEMENTS


 


NOW, THEREFORE, in consideration of the Lender’s
entering into the Financing Agreement and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the Borrower hereby
agrees as follows:


 


ARTICLE I 

SECURITY


 


Section 1.1             The Stock Collateral.


 


As security for the prompt and full payment and
performance of all of the Obligations, and as security for the prompt and full
performance of all of the obligations of the Borrower under this Agreement and
all of the Obligations under the Financing Agreement and all of the other
Financing Documents, whether now in existence or hereafter created and whether
joint, several, or both, primary, secondary, direct, contingent or otherwise,
the Borrower hereby pledges, assigns and grants to the Lender a security
interest in the following property of the Borrower (collectively, the “Stock
Collateral”), whether now existing or hereafter created or arising:


 

















 


(a)           One Hundred Twenty-Seven Million, Two Hundred
Ninety-Nine Thousand Seven Hundred Forty-Four (127,299,744) shares of the
common stock (the “Common Stock”) and Twenty-One Million Six Hundred Thirteen
Thousand (21,613,000) shares of the preferred stock (the “Preferred Stock” and
together with the Common Stock, the “Stock”) of GovDeals, Inc., a
corporation organized under the laws of the State of Delaware (the “Corporation”);


 


(b)           all stock rights, rights to subscribe, rights to
distributions, dividends (including, but not limited to, distributions in kind,
cash dividends, stock dividends, dividends paid in stock and liquidating
dividends) and any other rights and property interests including, but not
limited to, accounts, contract rights, instruments and general intangibles
arising out of or relating to the Corporation;


 


(c)           all other or additional (or less) stock or other
securities or property (including cash) paid or distributed in respect of the
Stock by way of stock-split, spin-off, split-up, reclassification, combination
of shares or similar corporate rearrangement;


 


(d)           all other or additional stock or other securities or
property (including cash) which may be paid or distributed in respect of the
Stock by reason of any consolidation, merger, exchange of stock, conveyance of
assets, liquidation or similar corporate reorganization; and


 


(e)           all proceeds (both cash and non-cash) of the
foregoing, whether now or hereafter arising under the foregoing.


 


Section 1.2             Rights of the Lender in the Stock Collateral.


 


The Borrower agrees that with respect to the Stock
Collateral the Lender shall have all the rights and remedies of a secured party
under the Uniform Commercial Code, as well as those provided by law and/or in
this Agreement.  Notwithstanding the fact
that the proceeds of the Stock Collateral constitute part of the Stock
Collateral, the Borrower may not dispose of the Stock Collateral or any part
thereof, except to the extent permitted by the Financing Documents.


 


Section 1.3             Rights of the Borrower in the Stock Collateral.


 


Until an Event of Default occurs, the Borrower shall
be entitled to receive all dividends and other distributions which may be paid
on the Stock Collateral and which are not otherwise prohibited by the Financing
Documents.  Any cash dividend or
distribution payable in respect of the Stock Collateral which represents, in
whole or in part a return of capital or a violation of this Agreement or the
other Financing Documents shall be received by the Borrower in trust for the
Lender, shall be paid immediately to the Lender and shall be retained by the
Lender as part of the Stock Collateral.


 


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ARTICLE II 

REPRESENTATIONS AND WARRANTIES


 


To induce the Lender to advance sums to the Borrower
under the Financing Agreement, the Borrower represents and warrants to the
Lender and shall be deemed to represent and warrant at the time of each request
for, and the time of each advance under, the credit facilities described in the
Financing Agreement, as follows:


 


Section 2.1             Stock Interests.


 


The Stock represents one hundred percent (100%) of the
equity interests of the Corporation and thereafter the Stock Collateral will
continue to represent the same percentage of the equity interest of the
Corporation, unless otherwise permitted under the Financing Agreement.


 


Section 2.2             Title to Properties.


 


The Borrower has good and marketable title to the
Stock Collateral.  The Borrower has
legal, enforceable and uncontested rights to use freely such property and
assets.  The Borrower is the sole owner
of all of the Stock Collateral, free and clear of all security interests,
pledges, voting trusts, agreements, Liens, claims and encumbrances whatsoever,
other than the security interest, assignment and lien granted under this
Agreement.  The interests assigned as
Stock Collateral are subject to no outstanding options, voting trusts,
shareholders agreement, or other requirements with respect to such interests.


 


Section 2.3             Perfection and Priority of Stock Collateral.


 


The Lender has, or upon execution of this Agreement
and receipt of the certificates representing the shares of Stock, together with
executed irrevocable, blank stock powers, will have a valid and perfected Lien
on and security interest in all Stock Collateral, free of all other Liens,
claims and rights of third parties whatsoever.


 


ARTICLE III 

COVENANTS


 


Until payment in full and the performance of all of
the Obligations and all of the obligations of the Borrower hereunder or secured
hereby, the Borrower covenants and agrees with the Lender as follows:


 


Section 3.1             Delivery of Stock Collateral.


 


The Borrower shall deliver immediately to the Lender (a) the
certificates representing the shares of the Stock, (b) immediately upon
its receipt of any additional (or fewer) shares of stock in the Corporation, the
certificates representing such additional shares of stock, (c) all
instruments, items of payment and other Stock Collateral received by the
Borrower, and (d) executed irrevocable, blank stock powers for all of the
assigned shares of stock in form and substance satisfactory to the Lender and
its counsel.  All Stock Collateral at any
time received or held by the Borrower shall be received and held by the
Borrower in trust for the benefit of the


 


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Lender, and shall be kept
separate and apart from, and not commingled with, the Borrower’s other assets.


 


Section 3.2             Defense of Title and Further Assurances.


 


The Borrower will do or cause to be done all things
necessary to preserve and to keep in full force and effect its interests in the
Stock Collateral, and shall defend, at its sole expense, the title to the Stock
Collateral and any part thereof.  The
Borrower hereby authorizes the filing of any financing statement or continuation
statement required under the Uniform Commercial Code.  Further, the Borrower shall promptly, upon
request by the Lender, execute, acknowledge and deliver any financing
statement, endorsement, renewal, affidavit, deed, assignment, continuation statement,
security agreement, certificate or other document as the Lender may reasonably
require in order to perfect, preserve, maintain, protect, continue, realize
upon, and/or extend the lien and security interest of the Lender under this
Agreement and the priority thereof.  The
Borrower shall pay to the Lender upon demand all taxes, costs and expenses
(including but not limited to reasonable attorney’s fees) incurred by the
Lender in connection with the preparation, execution, recording and filing of
any such document or instrument mentioned aforesaid.


 


Section 3.3             Protection of Stock Collateral.


 


The Borrower agrees that the Lender may at any time
take such steps as the Lender deems reasonably necessary to protect the Lender’s
interest in, and to preserve the Stock Collateral.  The Borrower agrees to cooperate fully with
the Lender’s efforts to preserve the Stock Collateral and will take such
actions to preserve the Stock Collateral as the Lender may in good faith
direct.  All of the Lender’s expenses of
preserving the Stock Collateral, including, without limitation, reasonable
attorneys’ fees, shall be part of the Enforcement Costs.


 


Section 3.4             Certain Notices.


 


The Borrower will promptly notify the Lender in
writing of any Event of Default and of any litigation, regulatory proceeding,
or other event which would reasonably be expected to have a Material Adverse
Effect.


 


Section 3.5             Books and Records; Information.


 


(a)           The Borrower shall maintain proper books
of record and account in which full, true and correct entries are made of all
dealings and transactions in relation to the Stock Collateral and which reflect
the Lien of the Lender thereon.


 


(b)           The Borrower agrees that the Lender may
from time to time and at its option (i) require the Borrower to, and the
Borrower shall, periodically deliver to the Lender records and schedules, which
show the status of the Stock Collateral and such other matters which affect the
Stock Collateral; (ii) verify the Stock Collateral and inspect the books
and records of the Borrower and make copies thereof or extracts therefrom; (iii) notify
any prospective buyers or transferees of the Stock Collateral or any other
Persons of the Lender’s interest in the Stock Collateral; and (iv) disclose
to prospective buyers or transferees from the Lender any and all information regarding
the Corporation, the Stock Collateral and/or the Borrower.


 


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Section 3.6             Disposition of Stock Collateral.


 


The Borrower will not sell, assign, convey, transfer
or otherwise dispose of the Stock Collateral or any part thereof, except, with
respect to any proceeds, to the extent permitted by the Financing Documents.


 


Section 3.7             Distributions.


 


The Borrower shall receive no dividend or distribution
or other benefit with respect to the Corporation, and shall not vote, consent,
waive or ratify any action taken, which would violate or be inconsistent with
any of the terms and provisions of this Agreement, the Financing Agreement or
any of the other Financing Documents or which would materially impair the
position or interest of the Lender in the Stock Collateral or dilute the
percentage of the ownership interests of the Corporation pledged to the Lender
hereunder, except as expressly permitted by the Financing Agreement.


 


Section 3.8             Liens.


 


The Borrower will not create, incur, assume or suffer
to exist any Lien upon any of the Stock Collateral, other than Liens in favor
of the Lender.


 


Section 3.9             Survival.


 


All representations and warranties contained in or
made under or in connection with this Agreement and the other Financing
Documents shall survive the making of any advance under the Financing Agreement
and the incurring of any other Obligations and the other obligations secured by
this Agreement.


 


ARTICLE IV 

DEFAULT AND RIGHTS AND REMEDIES


 


Section 4.1             Events of Default.


 


The occurrence of any one or more of the following
events shall constitute an “Event of Default” under the provisions of this
Agreement:


 


4.1.1        Default under Financing Agreement.


 


An Event of Default shall occur under the Financing Agreement.


 


4.1.2        Default under this Agreement.


 


If the Borrower shall fail to duly perform, comply
with or observe any of the terms, conditions or covenants of this Agreement.


 


4.1.3        Breach of Representations and Warranties.


 


Any representation or warranty made in this Agreement
or in any report, statement, schedule, certificate, opinion (including any
opinion of counsel for the Borrower), financial statement or other document
furnished by the Borrower or its agents or representatives in connection with this
Agreement, any of the other Financing Documents, or the Obligations or


 


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the other obligations
secured by this Agreement, shall prove to have been false or misleading when
made (or, if applicable, when reaffirmed) in any material respect.


 


4.1.4        Failure to Comply with Covenants.


 


The failure of the Borrower to perform, observe or
comply with any covenant, condition or agreement contained in this Agreement.


 


Section 4.2             Remedies.


 


Upon the occurrence of any Event of Default, the
Lender may at any time thereafter exercise any one or more of the following
rights, powers or remedies:


 


4.2.1        Uniform Commercial Code.


 


The Lender shall have all of the rights and remedies
of a secured party under the applicable Uniform Commercial Code and other
applicable Laws.  Upon demand by the
Lender and if not previously in the possession of the Lender, the Borrower
shall assist the Lender in the assembly of the Stock Collateral and assist in
making it available to the Lender, at a place designated by the Lender.  The Lender or its agents may without notice
from time to time enter upon the Borrower’s premises to take possession of the
Stock Collateral, to remove it, or otherwise to prepare it for sale, or to sell
or otherwise dispose of it.


 


4.2.2        Sale or Other Disposition of Stock Collateral.


 


The Lender may sell or redeem the Stock Collateral, or
any part thereof, in one or more sales, at public or private sale, conducted by
any officer or agent of, or auctioneer or attorney for, the Lender, at the
Lender’s place of business or elsewhere, for cash, upon credit or future
delivery, and at such price or prices as the Lender shall, in its sole
discretion, determine, and the Lender may be the purchaser of any or all of the
Stock Collateral so sold.  Further, any
written notice of the sale, disposition or other intended action by the Lender
with respect to the Stock Collateral which is sent by regular mail, postage
prepaid, to the Borrower at the address set forth in Section 5.1 (Notices),
or such other address of the Borrower which may from time to time be shown on
the Lender’s records, at least ten (10) days prior to such sale,
disposition or other action, shall constitute commercially reasonable notice to
the Borrower.  The Lender may
alternatively or additionally give such notice in any other commercially
reasonable manner.  Nothing in this
Agreement shall require the Lender to give any notice not required by
applicable Laws.


 


If any consent, approval, or authorization of any
Governmental Authority or any Person having any interest therein, should be
necessary to effectuate any sale or other disposition of the Stock Collateral,
the Borrower agrees to execute all such applications and other instruments, and
to take all other action, as may be required in connection with securing any
such consent, approval or authorization.


 


The Borrower recognizes that the Lender may be unable
to effect a public sale of all or a part of the Stock Collateral consisting of
securities by reason of certain prohibitions contained in the Securities Act of
1933, as amended, and other applicable federal and state Laws.  The Lender may, therefore, in its discretion,
take such steps as it may deem appropriate to comply with such Laws and may,
for example, at any sale of the Stock Collateral


 


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consisting of securities
restrict the prospective bidders or purchasers as to their number, nature of
business and investment intention, including, without limitation, a requirement
that the Persons making such purchases represent and agree to the satisfaction
of the Lender that they are purchasing such securities for their account, for
investment, and not with a view to the distribution or resale of any thereof.  The Borrower covenants and agrees to do or
cause to be done promptly all such acts and things as the Lender may request
from time to time and as may be necessary to offer and/or sell the securities
or any part thereof in a manner which is valid and binding and in conformance
with all applicable Laws.


 


4.2.3        Specific Rights With Regard to Stock Collateral.


 


In addition to all other rights and remedies provided
hereunder or as shall exist at law or in equity from time to time, upon the
continuance of an Event of Default, the Lender may (but shall be under no
obligation to), without notice to the Borrower, and the Borrower hereby
irrevocably appoints the Lender as its attorney-in-fact, with power of
substitution, in the name of the Lender or in the name of the Borrower or otherwise,
for the use and benefit of the Lender, but at the cost and expense of the
Borrower and without notice to the Borrower:


 


(a)           compromise, extend or renew any of the Stock
Collateral or deal with the same as it may deem advisable;


 


(b)           make exchanges, substitutions or surrenders of all or
any part of the Stock Collateral;


 


(c)           copy, transcribe, or remove from any place of business
of the Borrower all books, records, ledger sheets, correspondence, invoices and
documents, relating to or evidencing any of the Stock Collateral or without
cost or expense to the Lender, make such use of the Borrower’s places of
business as may be reasonably necessary to administer, control and collect the
Stock Collateral;


 


(d)           institute and prosecute legal and
equitable proceedings to enforce collection of, or realize upon, any of the
Stock Collateral;


 


(e)           settle, renew, extend, compromise,
compound, exchange or adjust claims in respect of any of the Stock Collateral
or any legal proceedings brought in respect thereof;


 


(f)            endorse or sign the name of the Borrower
upon any instruments, securities, powers, documents, or other writing relating
to or part of the Stock Collateral; and


 


(g)           take any other action necessary or
beneficial to realize upon or dispose of the Stock Collateral.


 


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4.2.4        Application of Proceeds.


 


Any proceeds of sale or other disposition of the Stock
Collateral will be applied by the Lender to the payment of the Enforcement
Costs, and any balance of such proceeds will be applied by the Lender to the
payment of the balance of the Obligations and the other obligations secured by
this Agreement in such order and manner of application as the Lender may from
time to time in its sole and absolute discretion determine.  If the sale or other disposition of the Stock
Collateral fails to fully satisfy the Obligations and the other obligations
secured by this Agreement, the Borrower shall remain liable to the Lender for
any deficiency.


 


4.2.5        Performance by Lender.


 


If the Borrower shall fail to perform, observe or
comply with any of the conditions, covenants, terms, stipulations or agreements
contained in this Agreement or any of the other Financing Documents, the Lender
without notice to or demand upon the Borrower and without waiving or releasing
any of the Obligations or any Default or Event of Default, may (but shall be
under no obligation to) at any time thereafter make such payment or perform
such act for the account and at the expense of the Borrower, and may enter upon
the premises of the Borrower for that purpose and take all such action thereon
as the Lender may consider necessary or appropriate for such purpose  and the Borrower hereby irrevocably appoints
the Lender as its attorney-in-fact to do so, with power of substitution, in the
name of the Lender or in the name of the Borrower or otherwise, for the use and
benefit of the Lender, but at the cost and expense of the Borrower and without
notice to the Borrower.  All sums so paid
or advanced by the Lender together with interest thereon from the date of
payment, advance or incurring until paid in full at the Post-Default Rate and
all costs and expenses, shall be deemed part of the Enforcement Costs, shall be
paid by the Borrower to the Lender on demand, and shall constitute and become a
part of the Obligations.


 


4.2.6        Other Remedies.


 


The Lender may from time to time proceed to protect or
enforce its rights by an action or actions at law or in equity or by any other
appropriate proceeding, whether for the specific performance of any of the
covenants contained in this Agreement or in any of the other Financing
Documents, or for an injunction against the violation of any of the terms of
this Agreement or any of the other Financing Documents, or in aid of the exercise
or execution of any right, remedy or power granted in this Agreement, the
Financing Documents, and/or applicable Laws.


 


Section 4.3             Costs and Expenses.


 


The Borrower shall pay on demand all costs and
expenses (including reasonable attorney’s fees), all of which shall be deemed
part of the Obligations, incurred by and on behalf of the Lender incident to
any collection, servicing, sale, disposition or other action taken by the
Lender with respect to the Stock Collateral or any portion thereof.


 


Section 4.4             Receipt Sufficient Discharge to Purchaser.


 


Upon any sale or other disposition of the Stock
Collateral or any part thereof, the receipt of the Lender or other Person
making the sale or disposition shall be a sufficient discharge to the


 


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purchaser for the
purchase money, and such purchaser shall not be obligated to see to the
application thereof.


 


Section 4.5             Remedies, etc. Cumulative.


 


Each right, power and remedy of the Lender as provided
for in this Agreement or in any of the other Financing Documents or in any
related instrument or agreement or now or thereafter existing at law or in
equity or by statute or otherwise shall be cumulative and concurrent and shall
be in addition to every other right, power or remedy provided for in this
Agreement or in the other Financing Documents or in any related document,
instrument or agreement or now or hereafter existing at law or in equity or by
statute or otherwise, and the exercise or beginning of the exercise by the
Lender of any one or more of such rights, powers or remedies shall not preclude
the simultaneous or later exercise by the Lender of any or all such other
rights, powers or remedies.


 


Section 4.6             No Waiver, etc.


 


No failure or delay by the Lender to insist upon the
strict performance of any term, condition, covenant or agreement of this
Agreement or of any of the other Financing Documents or of any related
documents, instruments or agreements, or to exercise any right, power or remedy
consequent upon a breach thereof, shall constitute a waiver of any such term,
condition, covenant or agreement or of any such breach, or preclude the Lender
from exercising any such right, power or remedy at any later time or
times.  By accepting payment after the
due date of any amount payable under this Agreement or under any of the other
Financing Documents or under any related document, instrument or agreement, the
Lender shall not be deemed to waive the right either to require prompt payment
when due of all other amounts payable under this Agreement or under any other
of the Financing Documents, or to declare a default for failure to effect such
prompt payment of any such other amount.


 


ARTICLE V 

MISCELLANEOUS


 


Section 5.1             Notices.


 


All notices, requests or demands which any party is
required or may desire to give to any other party under any provision of this
Agreement shall be given as set forth in the Financing Agreement.


 


Section 5.2             Amendments; Waivers.


 


This Agreement may not be amended, modified, or
changed in any respect except by an agreement in writing signed by the Lender
and the Borrower.  No waiver of any
provision of this Agreement, nor consent to any departure by the Borrower
therefrom, shall in any event be effective unless the same shall be in
writing.  No course of dealing between
the Borrower and the Lender and no act or failure to act from time to time on
the part of the Lender shall constitute a waiver, amendment or modification of
any provision of this Agreement or any of the other Financing Documents or any
right or remedy under this Agreement, under any of the other Financing
Documents or under applicable Laws.


 


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Section 5.3             Cumulative Remedies.


 


The rights, powers and remedies provided in this
Agreement and in the other Financing Documents are cumulative, may be exercised
concurrently or separately, may be exercised from time to time and in such
order as the Lender shall determine, subject to the provisions of this
Agreement, and are in addition to, and not exclusive of, rights, powers and
remedies provided by existing or future applicable Laws.  In order to entitle the Lender to exercise
any remedy reserved to it in this Agreement, it shall not be necessary to give any
notice, other than such notice as may be expressly required in this
Agreement.  Without limiting the
generality of the foregoing and subject to the terms of this Agreement, Lender
may:


 


(a)           proceed against the Borrower with or
without proceeding against any other Person who may be liable for all or any
part of the Obligations;


 


(b)           proceed against the Borrower with or
without proceeding under any of the other Financing Documents or against any
Collateral or other collateral and security for all or any part of the
Obligations;


 


(c)           without notice, release or compromise
with any guarantor or other Person liable for all or any part of the
Obligations under the Financing Documents or otherwise; and


 


(d)           without reducing or impairing the
obligations of the Borrower and without notice thereof: (i) fail to
perfect the Lien in any or all Collateral or to release any or all the Stock
Collateral or to accept substitute collateral, (ii) waive any provision of
this Agreement or the other Financing Documents, (iii) exercise or fail to
exercise rights of set-off or other rights, or (iv) accept partial
payments or extend from time to time the maturity of all or any part of the
Obligations.


 


Section 5.4             Severability.


 


In case one or more provisions, or part thereof,
contained in this Agreement or in the other Financing Documents shall be
invalid, illegal or unenforceable in any respect under any Law, then without
need for any further agreement, notice or action:


 


(a)           the validity, legality and enforceability
of the remaining provisions shall remain effective and binding on the parties
thereto and shall not be affected or impaired thereby;


 


(b)           the obligation to be fulfilled shall be
reduced to the limit of such validity;


 


(c)           if such provision or part thereof
pertains to repayment of the Obligations, then, at the sole and absolute
discretion of the Lender, all of the Obligations of the Borrower to the Lender
shall become immediately due and payable; and


 


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(d)           if the affected provision or part thereof
does not pertain to repayment of the Obligations, but operates or would
prospectively operate to invalidate this Agreement in whole or in material
part, then such provision or part thereof only shall be void, and the remainder
of this Agreement shall remain operative and in full force and effect.


 


Section 5.5             Successors and Assigns.


 


This Agreement shall be binding upon and inure to the
benefit of Borrower and Lender and their respective successors and assigns,
except that the Borrower shall not have the right to assign its rights
hereunder or any interest herein without the prior written consent of the
Lender.


 


Section 5.6             Applicable Law; Jurisdiction.


 


5.6.1        Applicable Law.


 


(a)           THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE, WITHOUT REGARD TO ITS CONFLICTS OF
LAW PRINCIPLES INSOFAR AS SUCH PRINCIPLES WOULD DEFER TO THE SUBSTANTIVE LAWS
OF SOME OTHER JURISDICTION.


 


(b)           EACH PARTY HERETO IRREVOCABLY AND
UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY
AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK,
AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER FINANCING DOCUMENT, OR FOR
RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO
IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH
ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE
COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL
COURT.  EACH OF THE PARTIES HERETO AGREES
THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE
ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER
PROVIDED BY LAW.


 


(c)           EACH PARTY HERETO IRREVOCABLY AND
UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER
FINANCING DOCUMENT IN ANY COURT REFERRED TO IN SECTION 5.6.1(b).  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN
INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH
COURT.


 


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Section 5.7             Headings.


 


The headings in this Agreement are included herein for
convenience only, shall not constitute a part of this Agreement for any other
purpose, and shall not be deemed to affect the meaning or construction of any
of the provisions hereof.


 


Section 5.8             Entire Agreement.


 


This Agreement is intended by the Lender and the
Borrower to be a complete, exclusive and final expression of the agreements
contained herein.  Neither the Lender nor
the Borrower shall hereafter have any rights under any prior agreements but
shall look solely to this Agreement for definition and determination of all of
their respective rights, liabilities and responsibilities under this Agreement.


 


Section 5.9             Waiver of Trial by Jury.


 


THE BORROWER AND THE LENDER HEREBY JOINTLY AND
SEVERALLY WAIVE TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO WHICH THE BORROWER
AND THE LENDER MAY BE PARTIES, ARISING OUT OF OR IN ANY WAY PERTAINING TO (A) THIS
AGREEMENT, (B) ANY OF THE FINANCING DOCUMENTS, OR (C) THE STOCK
COLLATERAL.  THIS WAIVER CONSTITUTES A
WAIVER OF TRIAL BY JURY OF ALL CLAIMS AGAINST ALL PARTIES TO SUCH ACTIONS OR
PROCEEDINGS, INCLUDING CLAIMS AGAINST PARTIES WHO ARE NOT PARTIES TO THIS
AGREEMENT.


 


This waiver is knowingly, willingly and voluntarily
made by the Borrower and the Lender, and the Borrower and the Lender hereby
represent that no representations of fact or opinion have been made by any
individual to induce this waiver of trial by jury or to in any way modify or
nullify its effect.  The Borrower and the
Lender further represent that they have been represented in the signing of this
Agreement and in the making of this waiver by independent legal counsel,
selected of their own free will, and that they have had the opportunity to
discuss this waiver with counsel.


 


Section 5.10           Liability of the Lender.


 


The Borrower hereby agrees that the Lender shall not
be chargeable for any negligence, mistake, act or omission of any accountant,
examiner, agency or attorney employed by the Lender in making examinations,
investigations or collections, the Lender’s failure to preserve or protect any
rights of the Borrower under the Stock Collateral or the Lender’s failure to
perfect, maintain, protect or realize upon any lien or security interest or any
other interest in the Stock Collateral or other security for the Obligations.


 


By inspecting the Stock Collateral or any other
properties of the Borrower or by accepting or approving anything required to be
observed, performed or fulfilled by the Borrower or to be given to the Lender
pursuant to this Agreement or any of the other Financing Documents, the Lender
shall not be deemed to have warranted or represented the condition,
sufficiency, legality, effectiveness or legal effect of the same, and such
acceptance or approval shall not constitute any warranty or representation with
respect thereto by the Lender.


 


[SIGNATURES APPEAR ON THE
FOLLOWING PAGE.]


 


12

















 


IN WITNESS WHEREOF, the Borrower has caused this
Agreement to be executed and delivered, as of the day and year first written
above.


 


	
   

  	
  LIQUIDITY SERVICES,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ James M. Rallo

  
	
   

  	
   

  	
  Name: James M. Rallo

  
	
   

  	
   

  	
  Title: Chief Financial
  Officer & Treasurer

  



 


[Signature Page to Pledge, Assignment and Security Agreement]