SEC Contract Filing

Filing Date: 2021-05-13

Document Content:
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<TYPE>EX-10.5
<SEQUENCE>6
<FILENAME>hgbl-ex105_186.htm
<DESCRIPTION>EX-10.5
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<p style="text-align:right;margin-top:0pt;line-height:13pt;margin-bottom:0pt;text-indent:0%;font-weight:bold;color:#000000;font-size:12pt;font-family:Arial;font-style:normal;text-transform:none;font-variant: normal;">Exhibit 10.5</p>
<p style="text-align:center;margin-top:0pt;line-height:13pt;margin-bottom:0pt;text-indent:0%;font-weight:bold;color:#000000;font-size:12pt;font-family:Times New Roman;font-style:normal;text-transform:none;font-variant: normal;"><font style="text-decoration:underline;">PLEDGE AND SECURITY AGREEMENT</font></p>
<p style="text-align:justify;margin-top:12pt;line-height:13pt;margin-bottom:0pt;margin-left:1.51%;text-indent:7.55%;color:#000000;font-size:12pt;font-family:Times New Roman;font-weight:normal;font-style:normal;text-transform:none;font-variant: normal;">This PLEDGE AND SECURITY AGREEMENT (this &#8220;<font style="font-weight:bold;font-style:italic;">Pledge Agreement</font>&#8221;), is made as of May 5, 2021, by <font style="font-weight:bold;">HERITAGE GLOBAL INC.</font>, a Florida corporation (together with its permitted successors and assigns, &#8220;<font style="font-weight:bold;font-style:italic;">Pledgor</font>&#8221;), having an address at 12625 High Bluff Drive, Suite 305, San Diego, CA 92130, for the benefit of <font style="font-weight:bold;">C3BANK</font>, a national banking association, having an address at 850 S. Coast Highway 101, Encinitas, California 92024 (together with its successors and assigns, &#8220;<font style="font-weight:bold;font-style:italic;">Lender</font>&#8221;).</p>
<p style="text-align:center;margin-top:12pt;line-height:13pt;margin-bottom:0pt;text-indent:0%;color:#000000;font-size:12pt;letter-spacing:-0.05pt;font-family:Times New Roman;font-weight:normal;font-style:normal;text-transform:none;font-variant: normal;"><font style="text-decoration:underline;">RECITALS</font> </p>
<p style="text-align:justify;margin-bottom:0pt;margin-top:12pt;line-height:13pt;margin-left:1.51%;text-indent:7.55%;font-weight:normal;font-style:normal;color:#000000;font-size:12pt;font-family:Times New Roman;text-transform:none;font-variant: normal;letter-spacing:0pt;"><font style="Background-color:#auto;text-decoration:none;">A.</font><font style="font-size:11pt;margin-left:36pt;color:#000000;"></font>Pledgor is the sole member or stockholder, as applicable, of Heritage Global Partners, Inc., a California corporation (&#8220;<font style="font-weight:bold;font-style:italic;">HGP</font>&#8221;); Heritage Global, LLC, a Delaware limited liability company (&#8220;<font style="font-weight:bold;font-style:italic;">HG</font>&#8221;); Heritage Global Capital, LLC, a Delaware limited liability company (&#8220;<font style="font-weight:bold;font-style:italic;">HGC</font>&#8221;); and National Loan Exchange, Inc., an Illinois corporation (&#8220;<font style="font-weight:bold;font-style:italic;">NLEX</font>&#8221;). Pledgor is the sole member of HG the sole member of Equity Partners HG, LLC, a Delaware limited liability company (&#8220;<font style="font-weight:bold;font-style:italic;">EPHG</font>&#8221;). (HGP, together with HG, HGC, NLEX, and EPHG collectively, the &#8220;<font style="font-weight:bold;font-style:italic;">Pledged Entities</font>&#8221; and each, a &#8220;<font style="font-weight:bold;font-style:italic;">Pledged Entity</font>&#8221;).</p>
<p style="text-align:justify;margin-bottom:0pt;margin-top:11pt;line-height:13pt;margin-left:1.51%;text-indent:7.55%;font-weight:normal;font-style:normal;color:#000000;font-size:12pt;font-family:Times New Roman;text-transform:none;font-variant: normal;letter-spacing:0pt;"><font style="Background-color:#auto;text-decoration:none;">.</font><font style="font-size:11pt;margin-left:36pt;color:#000000;"></font>Pursuant to that certain Business Loan Agreement (together with all extensions, renewals, modifications, substitutions and amendments thereof, the &#8220;<font style="font-weight:bold;font-style:italic;">Loan Agreement</font>&#8221;), dated as of the date hereof, and by and between Pledgor and Lender, Pledgor has become indebted to Lender with respect to a loan in the maximum principal amount of up to Ten Million and No/100 Dollars ($10,000,000.00) (the &#8220;<font style="font-weight:bold;font-style:italic;">Loan</font>&#8221;). Initially capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in the Loan Agreement.</p>
<p style="text-align:justify;margin-bottom:0pt;margin-top:11pt;line-height:13pt;margin-left:1.51%;text-indent:7.55%;font-weight:normal;font-style:normal;color:#000000;font-size:12pt;font-family:Times New Roman;text-transform:none;font-variant: normal;letter-spacing:0pt;"><font style="Background-color:#auto;text-decoration:none;">B.</font><font style="font-size:11pt;margin-left:36pt;color:#000000;"></font>As a condition precedent to making the Loan, Lender requires that Pledgor execute and deliver this Pledge Agreement to Lender. Pledgor acknowledges that it will receive material benefits from the making of the Loan.</p>
<p style="text-align:justify;margin-top:12pt;line-height:13pt;margin-bottom:0pt;margin-left:1.51%;text-indent:7.55%;color:#000000;font-size:12pt;font-family:Times New Roman;font-weight:normal;font-style:normal;text-transform:none;font-variant: normal;">NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, each Pledgor agrees as follows:</p>
<p style="text-align:justify;margin-top:11pt;line-height:13pt;margin-bottom:0pt;margin-left:1.51%;text-indent:15.09%;font-weight:bold;color:#000000;font-size:12pt;font-famil