Document:

Exhibit 10.3

 

CONTINUING GUARANTEE

 

WHEREAS,
MBC Funding II Corp., a New York corporation (the “Issuer”), is entering into that certain Indenture, dated
as of the date hereof (as the same may be amended, modified, supplemented or restated from time to time, the “Indenture”),
with Manhattan Bridge Capital, Inc. (the “Guarantor”) and Worldwide Stock Transfer, LLC, as initial trustee
(the “Trustee”), pursuant to which the Issuer is concurrently issuing its 6% Senior Secured Notes due April
2026 (the “Notes”) (all capitalized terms used herein shall have the same meaning as ascribed to them in the
Indenture unless otherwise expressly stated); and

 

WHEREAS,
as a condition precedent to the issuance of the Notes, the Guarantor is required to execute and deliver this Continuing Unconditional
Guarantee (this “Guarantee”) to the Trustee, for the benefit of itself and the Noteholders; and

 

WHEREAS,
the Guarantor is the sole stockholder of the Issuer and will directly or indirectly receive certain benefits from the proceeds
of the issuance of the Notes by the Issuer and is therefore willing to guaranty the prompt payment and performance of the Obligations
(as such term is hereinafter defined) of the Issuer, on the terms set forth in this Guarantee.

 

NOW,
THEREFORE, for value received and in consideration of the purchase of the Notes by the Noteholders, the undersigned unconditionally
guarantees the full and prompt payment and performance when due, whether at maturity or earlier, by reason of acceleration or otherwise,
and at all times thereafter, of all of the indebtedness and obligations of every kind and nature of the Issuer under the Indenture,
the Notes or any other Transaction Document, whether owing to the Indenture Trustee or the Noteholders with respect to the payment
of principal, interest, and collection costs owing under the Notes or otherwise (all such indebtedness and obligations being hereinafter
referred to as the “Obligations”). The Guarantor further agrees to pay all reasonable out-of-pocket costs and
expenses, including, without limitation, all court costs and reasonable attorneys’ and paralegals’ fees paid or incurred
by the Trustee in collecting all or any part of the Obligations from, or in prosecuting any action against, the Guarantor (together
with the Obligations, the “Guaranteed Obligations”). All amounts payable by the Guarantor under this Guarantee
shall be payable upon demand by the Trustee and shall be made in lawful money of the United States, in immediately available funds.

 

Section 1. No
Fraudulent Conveyance. Notwithstanding any provision of this Guarantee to the contrary, it is intended that this
Guarantee, and any security interests granted by the Guarantor to secure this Guarantee, do not constitute a
“Fraudulent Conveyance” (as defined below). Consequently, the Guarantor agrees that if this Guarantee, or any
such security interests securing this Guarantee, would, but for the application of this sentence, constitute a Fraudulent
Conveyance, this Guarantee and each such security interest shall be valid and enforceable only to the maximum extent that
would not cause this Guarantee or such security interest to constitute a Fraudulent Conveyance, and this Guarantee or the
Transaction Documents providing for such security interest shall automatically be deemed to have been amended accordingly at
all relevant times. For purposes hereof, “Fraudulent Conveyance” means a fraudulent conveyance under
Section 548 of Chapter 11 of Title 11 of the United States Code (11 U.S.C. § 101 et seq.), as amended (the
“Bankruptcy Code”) or a fraudulent conveyance or fraudulent transfer under the provisions of any
applicable fraudulent conveyance or fraudulent transfer law or similar law of any state, nation or other governmental
unit, as in effect from time to time.

 

     

     

    

 

Section
2. Unconditional Guaranty. The Guarantor hereby agrees that, its obligations under this Guarantee shall be unconditional,
irrespective of (a) the genuineness, validity, regularity, enforceability or any future amendment of, or change in this Guaranty,
the Transaction Documents, the Obligations or any part thereof, or of the Notes or other document evidencing all or any part of
the Obligations, (b) the absence of any attempt to collect from the Issuer or any other guarantor of all or any part of the Obligations
or other action to enforce the same, (c) the waiver, modification, extension, amendment or consent by the Trustee or the Noteholders
with respect to any provision of any instrument evidencing the Obligations, or any part thereof, or any other agreement heretofore,
now or hereafter executed by the Issuer or any other guarantor of all or any part of the Obligations, and delivered to the Trustee,
(d) failure by the Trustee to take any steps to perfect and maintain its security interest in, or to preserve its rights to, any
security or collateral for the Obligations or any guaranty, (e) the existence or nonexistence of any defenses which may be available
to the Issuer or any other guarantor of all or any part of the Obligations, (f) the institution of any proceeding under the Bankruptcy
Code, or any similar proceeding, by or against any of the Issuer or any other guarantor, or the Trustee’s election in any
such proceeding of the application of Section 1111(b)(2) of the Bankruptcy Code, (g) any borrowing or grant of a security interest
by the Issuer, as debtor-in-possession, under Section 364 of the Bankruptcy Code (or use of cash collateral under Section 363 of
the Bankruptcy Code), (h) the disallowance, under Section 502 of the Bankruptcy Code, of all or any portion of the Trustee’s
claim(s) for repayment of the Obligations, (i) any assignment or other transfer of the Issuer’s interest or any assumption
of the Issuer’s obligations under the Notes, the Indenture or any Transaction Document or (j) any other circumstance which
might otherwise constitute a legal or equitable discharge or defense of a guarantor.

 

Section
3. Demand by the Trustee. It is expressly understood and agreed that, if, at any time, the outstanding Obligations are declared
to be immediately due and payable, then the Guarantor shall, without demand, pay to the Trustee the entire amount of the outstanding
Obligations. Payment by the Guarantor shall be made to the Trustee in immediately available federal funds to an account designated
by the Trustee or at the address set forth herein for the giving of notice to the Trustee or at any other address that may be specified
in writing from time to time by the Trustee, and shall be credited and applied in accordance with the Indenture.

 

Section 4. Waiver.
The Guarantor hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of
receivership or bankruptcy of the Issuer or other guarantors, protest or notice with respect to the Obligations and all
demands whatsoever, and covenants that this Guarantee will not be discharged, except by complete and indefeasible payment and
performance of the Guaranteed Obligations. The Guarantor further waives notice of (a) acceptance of this Guarantee, (b) the
existence or incurring from time to time of any Obligations guarantied hereunder, (c) the existence of any Default or Event
of Default, the making of demand, nonpayment, or the taking of any action by the Trustee or any Noteholder, under the
Indenture or any of the other Transaction Documents, and (d) the benefit of any statute of limitations. Upon the occurrence
and during the continuance of any Event of Default, the Trustee may, at its sole election, proceed directly and at once,
without notice, against the Guarantor to collect and recover the full amount or any portion of the Obligations, without first
proceeding against the Issuer or any other guarantor, or against any security or collateral for the Obligations. The
Guarantor’s obligations hereunder shall not be subject to any reduction, limitation, impairment or termination for any
reason, including, without limitation, any claim of waiver, release, surrender, attention or compromise and shall not be
subject to, and the Guarantor hereby irrevocably waives, any defense or set-off, counterclaim, recoupment, or termination
whatsoever by reason of the invalidity, illegality or unenforceability of any of the Guarantor’s obligations hereunder
or otherwise. The Guarantor agrees that this Guarantee constitutes a guarantee of payment when due and not of collection.

 

    	 	- 2 -	 

     

    

 

Section
5. Authorization. The Trustee is hereby authorized in accordance with the Indenture, without notice or demand and without
affecting the liability of the Guarantor hereunder, at any time and from time to time to (a) renew, extend, accelerate or otherwise
change the time for payment of, or other terms relating to, the Obligations or otherwise modify, amend or change the terms of the
Notes or other agreement, document or instrument now or hereafter executed by the Issuer or any other guarantor and delivered to
the Trustee; (b) accept partial payments on the Obligations; (c) take and hold security or collateral for the payment of the Obligations
guaranteed hereby, or for the payment of this Guarantee, or for the payment of any other guaranties of the Obligations, and exchange,
enforce, waive and release any such security or collateral; (d) apply such security or collateral and direct the order or manner
of sale or other disposition thereof as in its discretion it may determine; (e) take any action under or in respect of the Transaction
Documents in the exercise of any remedy, power or privilege contained therein or available to it at law, equity or otherwise, or
waive or refrain from exercising any such remedies, powers or privileges and (f) settle, release, compromise, collect or otherwise
liquidate the Obligations with respect to any security or collateral therefor in any manner, without affecting or impairing the
obligations of the Guarantor hereunder. The time and manner of application of any payments or credits, whether received from the
Issuer or any other source, shall be made by the Trustee in accordance with the Indenture. All such payments and credits may be
applied, reversed and reapplied, in whole or in part, to any of the Obligations as the Trustee shall determine in its discretion
without affecting the validity or enforceability of this Guarantee.

 

Section
6. The Guarantor’s Responsibility. The Guarantor hereby assumes responsibility for keeping itself informed of the
financial condition of the Issuer and any and all endorsers and/or other guarantors of any instrument or document evidencing all
or any part of the Obligations and of all other circumstances bearing upon the risk of nonpayment of the Obligations or any part
thereof, and the Guarantor hereby agrees that neither the Trustee nor any Noteholder shall have any duty to advise the Guarantor
of information known to the Trustee or such Noteholder regarding such condition or any such circumstances or to undertake any investigation.
If the Trustee or any Noteholder, in its discretion, undertakes at any time or from time to time to provide any such information
to the Guarantor, neither the Trustee nor such Noteholder shall be under any obligation to update any such information or to provide
any such information to the Guarantor on any subsequent occasion. The Guarantor further acknowledges that the Guarantor has examined
or had the opportunity to examine the Indenture and the other Transaction Documents, and waives any defense which may exist resulting
from the Guarantor’s failure to receive or examine at any time the Indenture or the other Transaction Documents.

 

    	 	- 3 -	 

     

    

 

Section 7. Consent.
The Guarantor consents and agrees that neither the Trustee nor any Noteholder shall be under any obligation to marshal any
assets in favor of the Guarantor or against or in payment of any or all of the Obligations. The Guarantor further agrees
that, to the extent that the Issuer, the Guarantor or any other Person makes a payment or payments to the Trustee or a
Noteholder, or the Trustee or a Noteholder receives any proceeds of collateral, which payment or payments or any part thereof
are subsequently invalidated, declared to be fraudulent or preferential, set aside and/or required to be repaid to the
Issuer, its estates, the trustees, receivers or any other Person, including, without limitation, the Guarantor, under any
bankruptcy law, state or federal law, common law or equitable theory, then to the extent of such payment or repayment, the
Obligations or the part thereof which has been paid, reduced or satisfied by such amount, and the Guarantor’s
obligations hereunder with respect to such portion of the Obligations, shall be reinstated and continued in full force and
effect as of the date such initial payment, reduction or satisfaction occurred.

 

Section
8. Binding on Assigns. This Guarantee shall be binding upon the Guarantor and upon its successors (including, without limitation,
any receiver, the trustee or debtor-in- possession of or for the Guarantor) and assigns of the Guarantor, and shall inure to the
benefit of the Trustee, the Noteholders and their respective successors and assigns; provided, however, that the
Guarantor’s obligations hereunder may not be delegated or assigned without the Trustee’s prior written consent.

 

Section
9. Representations and Warranties. The Guarantor represents and warrants (which representations and warranties shall survive
the execution and delivery hereof) to the Trustee and the Noteholders that:

 

(a)           The
Guarantor 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 Guarantee and the other Transaction Documents to which the Guarantor
is a party, and to perform its obligations hereunder and thereunder.

 

(b)           The
execution and delivery by the Guarantor of this Guarantee and the other Transaction Documents to which the Guarantor is a party,
and the performance by the Guarantor of its obligations hereunder and thereunder, has been duly and validly authorized and will
not violate the organizational documents of the Guarantor, 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 the Guarantor or any order, writ, judgment or decree of any arbitrator, court or other Governmental
Authority applicable to the Guarantor or any of its assets, any indenture, mortgage, deed of trust, partnership agreement or other
agreement or instrument to which the Guarantor is a party or by which the Guarantor or all or any portion of its assets is bound,
which breach or violation would materially adversely affect either the ability of the Guarantor to perform its obligations under
this Guarantee and such other Transaction Documents or the financial condition of the Guarantor.

 

(c)           The
Guarantor has requisite power and authority to transact the businesses in which it is now engaged. The Guarantor is duly
qualified to do business and is in good standing in each jurisdiction where it is required to be so qualified in connection
its business and operations. The Guarantor possesses all rights, licenses, permits and authorizations, governmental or
otherwise, necessary to entitle it to transact the businesses in which it is now engaged, the failure of which to obtain
would result in a material adverse effect on either the ability of the Guarantor to perform its obligations under this
Guarantee and the other Transaction Documents to which it is a party or the financial condition of the Guarantor.

 

    	 	- 4 -	 

     

    

 

(d)           This
Guarantee and the other Transaction Documents to which it is a party have been duly executed and delivered by the Guarantor and
constitute valid, legal and binding obligations of the Guarantor, enforceable against the Guarantor in accordance with the terms
hereof and thereof, 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.

 

(e)           The
Guarantor has no employee benefit plans and is not required to make any contributions to any Plans.

 

(f)           The
Guarantor 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 the Guarantor from entering into this Guarantee or the other Transaction Documents to which it is a party.

 

(g)           The
Transaction Documents and the Prospectus do not contain any untrue statement of a material fact or omit to state any material fact
necessary to make statements contained herein or therein not misleading.

 

(h)           There
are no Proceedings at law or in equity or by or before any government authority, arbitral tribunal or other body now pending against
the Guarantor or, to the best knowledge of the Guarantor, threatened against the Guarantor which questions the validity or legality
of or seeks damages in connection with this Guarantee or which seeks to prevent the consummation of any of the transactions contemplated
by this Guarantee.

 

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

 

Section
10. Continuation. This Guarantee shall continue in full force and effect (and may not be revoked or terminated) until such
time as the Trustee has, in writing, notified the Guarantor that all of the Obligations have been indefeasibly paid and satisfied
in full and the Indenture has been terminated.

 

Section 11. Subrogation.
The Guarantor shall not at any time exercise any rights of any nature of subrogation, contribution, reimbursement or
indemnity and any right of the Guarantor to recourse to any assets or property of, or payment from, the Issuer or any other
guarantor of all or any part of the Obligations as a result of any payments made or to be made hereunder for any reason,
unless and until all of the Obligations have been indefeasibly paid and satisfied in full. Any payments received by the
Guarantor in violation of this Section 11 shall be held in trust for and immediately remitted to the Trustee.

 

    	 	- 5 -	 

     

    

 

 

Section
12. Subordination. The payment of any and all of indebtedness, liabilities and obligations of the Issuer to the Guarantor
of every kind or nature, whether joint or several, due or to become due, absolute or contingent, now existing or hereafter arising,
and whether principal, interest, fees, costs, expenses or otherwise (collectively, the “Subordinated Debt”),
is expressly subordinated to the Obligations. So long as any Obligations remain outstanding and the Indenture has not been terminated,
no payment of any kind (by voluntary payment, prepayment, acceleration, setoff or otherwise) of any portion of the Subordinated
Debt may be made by the Issuer or received or accepted by the Guarantor at any time. Until such time as the Obligations have been
paid and satisfied in full and the Indenture has been terminated, the Guarantor will not (a) obtain any lien, security interest
or other encumbrance on any property of the Issuer to secure the Subordinated Debt, or (b) make demand for payment of the Subordinated
Debt or commence any lawsuit, action or proceeding of any kind against the Issuer to recover all or any part of the Subordinated
Debt. Any payments received by the Guarantor in violation of this Section 12 shall be held in trust for and immediately remitted
to the Trustee.

 

Section
13. GOVERNING LAW. THIS GUARANTEE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
(INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK, BUT OTHERWISE WITHOUT REGARD TO CONFLICT OF
LAWS PRINCIPLES).

 

Section
14. CONSENT TO JURISDICTION; SERVICE OF PROCESS; JURY TRIAL WAIVER. ANY ACTION OR PROCEEDING AGAINST ANY OF THE PARTIES
HERETO RELATING IN ANY WAY TO THIS GUARANTEE MAY ONLY BE BROUGHT AND ENFORCED IN THE COURTS OF THE STATE OF NEW YORK SITTING IN
THE BOROUGH OF MANHATTAN OR OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND EACH OF THE GUARANTOR
AND, BY ITS ACCEPTANCE OF THIS GUARANTEE, THE TRUSTEE IRREVOCABLY SUBMITS TO THE JURISDICTION OF EACH SUCH COURT IN RESPECT OF
ANY SUCH ACTION OR PROCEEDING. EACH OF THE GUARANTOR AND, BY ITS ACCEPTANCE OF THIS GUARANTEE, THE TRUSTEE HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO REMOVE ANY SUCH ACTION OR PROCEEDING BY REASON OF IMPROPER VENUE OR INCONVENIENT
FORUM. AS LONG AS ANY OBLIGATIONS REMAIN OUTSTANDING AND THE INDENTURE HAS NOT BEEN TERMINATED, SERVICE OF PROCESS UPON THE GUARANTOR
AND, BY ITS ACCEPTANCE OF THIS GUARANTEE, THE TRUSTEE SHALL, TO THE FULLEST EXTENT PERMITTED BY LAW, BE DEEMED IN EVERY RESPECT
EFFECTIVE SERVICE IN ANY SUCH LEGAL ACTION OR PROCEEDING. EACH OF THE GUARANTOR AND, BY ITS ACCEPTANCE OF THIS GUARANTEE, THE TRUSTEE
HEREBY IRREVOCABLY WAIVES TRIAL BY JURY.

 

    	 	- 6 -	 

     

    

 

Section
15. Entire Agreement; Severability. This Guarantee represents the entire understanding and agreement between the
Guarantor, on the one hand, and the Trustee and the Noteholders, on the other hand, with respect to the subject matter
contained herein, and there are no other existing agreements or understandings, whether oral or written, between or among
such parties as to such subject matter. Wherever possible, each provision of this Guarantee shall be interpreted in such
manner as to be effective and valid under applicable law, but if any provision of this Guarantee shall be prohibited by or
invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity,
without invalidating the remainder of such provision or the remaining provisions of this Guarantee.

 

Section
16. Cumulative Remedies; Amendments. All rights and remedies hereunder and under the Indenture and the other Transaction
Documents are cumulative and not alternative, and the Trustee or the Noteholders may proceed in any order from time to time against
the Issuer, the Guarantor or any other guarantor of all or any part of the Obligations and their respective assets. Neither the
Trustee nor the Noteholders shall have any obligation to proceed at any time or in any manner against, or exhaust any or all of
the Trustee’s or the Noteholders’ rights against, the Issuer or any other guarantor of all or any part of the Obligations
prior to proceeding against the Guarantor hereunder. No failure or delay on the part of the Trustee or the Noteholders in the exercise
of any power, right or privilege shall impair such power, right or privilege or be construed to be a waiver of any default or acquiescence
therein, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof
or of any other right, power or privilege. No amendment, modification or waiver of any provision of this Guarantee, or consent
to any departure by the Guarantor therefrom, shall be effective unless the same shall be in writing and signed by the Trustee and
the Guarantor. Each amendment, modification or waiver shall be effective only in the specific instance and for the specific purpose
for which it was given.

 

Section
17. 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 the Guarantor Manhattan Bridge
Capital, Inc., 60 Cutter Mill Road, Suite 205, Great Neck, New York 11021, Attention: Assaf Ran; and (b) in the case of the Trustee,
Worldwide Stock Transfer, LLC, One University Plaza Drive, 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.

 

Section 18.           Relation to
Intercreditor Agreement.

 

(i)           Notwithstanding anything
herein to the contrary, the obligations and liabilities of the Guarantor pursuant to this Guarantee and the exercise of any right
or remedy by the Trustee hereunder are subject to the provisions of that certain Intercreditor Agreement dated as of the date hereof
among the Trustee and Webster Business Credit Corporation, as such agreement may from time to time be amended, restated, supplemented
or otherwise modified. In the event of any conflict between the terms of such agreement and this Guarantee, the terms of such agreement
shall govern and control.

 

[Remainder of Page Intentionally Left Blank]

    	 	- 7 -	 

     

    

 

IN WITNESS WHEREOF, this Guarantee
has been duly executed by the undersigned as of April 25, 2016.

 

 

	 	MANHATTAN BRIDGE CAPITAL, INC.
	 	 	 
	 	By:	/s/ Assaf Ran	 
	 	 	Assaf Ran
	 	 	Chief Executive Officer

 

 

 

 

 

 

 

 

 

Signature Page to Continuing GuaranteeExhibit 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

 

    	 	ii	 

     

    

 

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”);

 

    	 	2	 

     

    

 

(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

 

    	 	3	 

     

    

 

(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.

 

    	 	4	 

     

    

 

(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.

 

    	 	5	 

     

    

 

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).

 

    	 	6	 

     

    

 

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.

 

    	 	7	 

     

    

 

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.

 

    	 	8	 

     

    

 

(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.

 

    	 	9	 

     

    

 

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.

 

    	 	10	 

     

    

 

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.

 

    	 	11	 

     

    

 

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.

 

    	 	12	 

     

    

 

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.

 

    	 	13	 

     

    

 

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]

 

 

    	 	14	 

     

    

 

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

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