LOAN MODIFICATION AGREEMENT AND REAFFIRMATION OF LOAN [HERITAGE GLOBAL INC.; LOAN NO.:13880]
Exhibit 10.21
LOAN MODIFICATION AGREEMENT AND
REAFFIRMATION OF LOAN
[HERITAGE GLOBAL INC.; LOAN NO.:13880]
This LOAN MODIFICATION AGREEMENT AND REAFFIRMATION OF LOAN (this “Agreement”) is made effective as of December 27, 2024 (“Reference Date”) by and between Heritage Global Inc., a Florida corporation (“Borrower”), and C3bank, National Association (“Lender”) with respect to the following facts:
R E C I T A L S:
A.
On or about May 5, 2021, ▇▇▇▇▇▇ entered into a Business Loan Agreement (as modified, the “Existing Loan Agreement”, as modified by this Agreement and as amended and restated by that certain Amended and Restated Business Loan Agreement dated December 27, 2024, the “Loan Agreement”) with Borrower whereby Lender agreed to make a revolving line of credit to Borrower in the maximum principal amount of Ten Million and No/100 Dollars ($10,000,000.00) (the “Loan”). The Loan was evidenced by, among other things, (i) that certain Promissory Note dated May 5, 2021, from Borrower in favor of Lender in the original principal amount of Ten Million and No/100 Dollars ($10,000,000.00), as amended and restated by that certain Amended and Restated Promissory Note dated May 26, 2023 (as the same may be amended, restated, modified or replaced from time to time, the “Existing Note”) as modified by this Agreement and as amended and restated by that certain Amended and Restated Promissory Note dated December 27, 2024 (the “Note”), (ii) that certain Commercial Security Agreement dated May 5, 2021, as modified by this Agreement and as amended and restated by that certain Amended and Restated Commercial Security Agreement dated December 27, 2024, by and among Borrower, Heritage Global Partners Inc., a California corporation (“HGP”), Heritage Global LLC, a Delaware limited liability company (“HG”), Heritage ALT LLC, formerly known as Equity Partners HG LLC, a Delaware limited liability company (“EPHG”), National Loan Exchange, Inc., an Illinois company (“NLEX”), Heritage Global Capital LLC, a Delaware limited liability company (“HGC”), HG ALT LLC, a Connecticut limited liability company (“HG ALT”), and HGPNP, LLC, a Delaware limited liability company (“HGPNP”) together with HGP, HG, EPHG, NLEX and HG ALT, each a “Grantor” and collectively, the “Grantors”) and Lender (as the same heretofore may have been or hereafter may be amended, restated, supplemented, extended, renewed, replaced or otherwise modified from time to time, the “Security Agreement”), and (iii) Pledge and Security Agreement of even date hereof by and between Borrower and Lender (as the same heretofore may have been or hereafter may be amended, restated, supplemented, extended, renewed, replaced or otherwise modified from time to time, the “Pledge Agreement”);
B.
On or about April 1, 2022, ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ entered into that certain Loan Modification Agreement and Reaffirmation of Loan dated as of such date (the “First Modification”), which, among other things, revised EPHG’s name and the Loan financial covenants.
C.
On or about May 4, 2023, ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ entered into that certain Change in Terms Agreement dated as of such date (the “Second Modification”), which, among other things, extended the maturity date to June 7, 2023.
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Exhibit 10.21
D.
On or about May 26, 2023, ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ entered into that certain Loan Modification Agreement and Reaffirmation of Loan dated as of such date (the “Third Modification”), which among other things, revised the interest rate, extended the maturity date to October 27, 2024, added the Unused Line Fee, and revised the Loan financial covenants.
E.
On or about July 24, 2024, ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ entered into that certain Loan Modification Agreement and Reaffirmation of Loan dated as of such date (the “Fourth Modification”), which among other things revised the Loan financial covenants.
F.
On or about October 4, 2024, Borrower and ▇▇▇▇▇▇ entered into that certain Loan Modification Agreement and Reaffirmation of Loan dated as of such date (the “Fifth Modification”), which among other things, extended the maturity date to December 27, 2024.
G.
This Agreement, the Loan Agreement, the First Modification, the Second Modification, the Third Modification, the Fourth Modification, the Fifth Modification, the Note, the Security Agreement, the Pledge Agreement, and the Related Documents together with any other documents required by Lender to evidence or secure the Loan, and any and all amendments and modifications thereto, shall be collectively referred to as the “Loan Documents”. Capitalized terms not otherwise defined herein shall have the meaning ascribed to them in the Loan Agreement (or if not defined in the Loan Agreement, in the other Loan Documents);
H.
▇▇▇▇▇▇▇▇ has now requested and ▇▇▇▇▇▇ hereby agrees to, subject to the terms and conditions of this Agreement, among other things, to extend the Maturity Date, revise the interest rate, and revise the Loan financial covenants.
I.
At Borrower’s request, Lender has agreed to modify the Existing Loan Agreement and other Loan Documents, conditioned upon ▇▇▇▇▇▇▇▇’s execution of and performance under this Agreement and the ratification and confirmation of the Loan and the Loan Documents, and of any and all such documents required by ▇▇▇▇▇▇ and completion of such other acts or things reasonably requested by ▇▇▇▇▇▇.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and for other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
1.
Recitals. The recitals set forth above are hereby incorporated herein as true and correct.
2.
Confirmation of Loan. Borrower hereby acknowledges and confirms Borrower’s obligations to Lender as set forth in the Loan Documents and reaffirms and restates each and every term, condition, provision, and waiver thereof. There is no intention to otherwise modify, increase, reduce or alter the respective rights or obligations of Lender under the Loan Documents except as set forth herein. Nothing in this Agreement shall be deemed to constitute Lender’s release of Borrower of any of its obligations under the Loan Documents.
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Exhibit 10.21
3.
Representations and Warranties. Borrower hereby represents and warrants to Lender that:
a.
This Agreement and the other Loan Documents represent valid and enforceable obligations against the Borrower.
b.
As of the Reference Date, ▇▇▇▇▇▇▇▇ has no claims or defenses against Lender or any other person or entity which would or might affect (i) the enforceability of any provisions of the Loan Documents; or (ii) the collectability of sums advanced by Lender in connection with the Loan.
c.
The execution, delivery, and performance by Borrower of this Agreement and the Loan Documents have been duly authorized, are not in conflict with the terms of any organizational document of such Borrower and will not violate any law, rule, or order of any court or governmental agency or body to which Borrower is subject. All representations and warranties contained in this Agreement, the Existing Loan Agreement and in any and all of the other Loan Documents are true and correct as of the date of this Agreement, and all such representations and warranties shall survive the execution of this Agreement.
d.
As of the Reference Date, there is no uncured breach or default under the Loan Documents or any material agreement. There have been no new material agreements entered into since the date of the closing of the Loan and no amendments, waivers, modifications or terminations of any material agreement have occurred, other than as stated herein.
e.
Borrower acknowledges that this modification does not guarantee any modification beyond this modification of Borrower’s obligations as detailed herein, and any such additional modification and/or amendment is subject to Lender’s written approval, in ▇▇▇▇▇▇’s sole discretion.
4.
Additional Amendment to Loan Documents. The Loan Documents are hereby modified as follows:
a.
Maturity Date. The Maturity Date is hereby extended to June 27, 2026, the “New Maturity Date”. For avoidance of doubt the entire outstanding indebtedness shall be due and payable on June 27, 2026, or on such earlier date resulting from acceleration or otherwise as provided in the Loan Documents.
b.
Definition – Note. The term “Note” is hereby deleted in its entirety and the following is hereby inserted in its place: “The word “Note” means the Amended and Restated Note dated December 27, 2024, and executed by Heritage Global, Inc. in the principal amount of Ten Million and No/100 Dollars ($10,000,000.00), together with all renewals of, extensions of, modifications of, refinancings or, consolidations of, and substitutions for the note or credit agreement.” For avoidance of doubt, such Amended and Restated Note shall be executed by Borrower in favor of Lender concurrently herewith in the form set forth in Exhibit A attached hereto.
c.
Definition – Loan Agreement. The term “Loan Agreement” is hereby deleted in its entirety and the following is hereby inserted in its place: “The word “Loan
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Exhibit 10.21
Agreement” means the Amended and Restated Business Loan Agreement dated December 27, 2024, and executed by Heritage Global, Inc. in the principal amount of Ten Million and No/100 Dollars ($10,000,000.00), together with all renewals of, extensions of, modifications of, refinancings or, consolidations of, and substitutions for the note or credit agreement.” For avoidance of doubt, such Amended and Restated Note shall be executed by Borrower in favor of Lender concurrently herewith in the form set forth in Exhibit B attached hereto.
d.
Definition – Commercial Security Agreement. The term “Commercial Security Agreement” is hereby deleted in its entirety and the following is hereby inserted in its place: “The word “Commercial Security Agreement” means the Amended and Restated Commercial Security Agreement December 27, 2024, and executed by Borrower, Heritage Global Partners Inc., a California corporation (“HGP”), Heritage Global LLC, a Delaware limited liability company (“HG”), Heritage ALT LLC, formerly known as Equity Partners HG LLC, a Delaware limited liability company (“EPHG”), National Loan Exchange, Inc., an Illinois company (“NLEX”), Heritage Global Capital LLC, a Delaware limited liability company (“HGC”), HG ALT LLC, a Connecticut limited liability company (“HG ALT”), and HGPNP, LLC, a Delaware limited liability company (“HGPNP”) together with HGP, HG, EPHG, NLEX and HG ALT, each a “Grantor” and collectively, the “Grantors”), in the principal amount of Ten Million and No/100 Dollars ($10,000,000.00), together with all renewals of, extensions of, modifications of, refinancings or, consolidations of, and substitutions for the note or credit agreement.” For avoidance of doubt, such Amended and Restated Commercial Security Agreement shall be executed by Grantors in favor of Lender concurrently herewith in the form set forth in Exhibit C attached hereto.
e.
Pledge. Pledgor under that certain Pledge and Security Agreement dated May 5, 2021 (“Pledge Agreement”), is a sole member or stockholder as applicable of HGPNP and HG ALT (collectively, “Additional Pledged Entities”) and hereby adds them as a Pledge Entity to the Pledge Agreement.
f.
For avoidance of doubt, as of December 27, 2024, the unpaid principal balance of the Loan was ($0.00).
g.
From and after the Reference Date, any references in any Loan Documents to any of the Loan Documents shall mean such Loan Document, as modified by this Agreement.
5.
No Novation. Nothing in this Agreement shall be construed to be a novation, cancellation, satisfaction, release, or substitution of the Loan or other indebtedness of Borrower under the Note or other Loan Documents.
6.
No Other Modifications. Except as amended and/or modified by this Agreement, all of the obligations and other terms of the Existing Loan Agreement and other Loan Documents shall remain in full force and effect, unaltered and unchanged by this Agreement.
7.
Conditions Precedent to Loan Modification. The obligation of Lender to give effect to the modifications set forth herein is subject to the satisfaction of each of the following conditions precedent:
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Exhibit 10.21
a.
Borrower as necessary and appropriate, shall execute, acknowledge and deliver to Lender: (i) such duly adopted consents and/or resolutions of Borrower and of such other entities as Lender may require, and naming the person(s) authorized to execute this Agreement on behalf of each such entity; and (ii) any further and additional documents as Lender may determine to be necessary or appropriate, including, without limitation, such documents as may be necessary or appropriate to insure the proper attachment, perfection and priority of ▇▇▇▇▇▇’s security interest in the Collateral.
b.
Borrower shall have paid to Lender, in immediately available funds, the amount of all expenses incurred by Lender in connection with (i) the negotiation and preparation of this Agreement and all other documents executed and delivered pursuant hereto, and (ii) the transactions contemplated by this Agreement and all documents executed and delivered pursuant hereto (including, without limitation, legal fees and expenses, title premiums and other closing costs);
c.
Borrower shall have paid to Lender upon or before execution of this Agreement, in immediately available funds, the amount of the document fees and expenses incurred to date by Lender in the amount of Seven Thousand Five Hundred and No/100 Dollars ($7,500.00) the “Document Fee”).
d.
The representations and warranties contained in this Agreement, the Existing Loan Agreement and the other Loan Documents shall be true and correct, in all material respects, as of the effective date of this Agreement; and
e.
Lender shall be satisfied, in its sole discretion, that after giving effect to this Agreement no Event of Default shall exist and no event, circumstance or condition shall exist which, with notice or passage of time or both would be an Event of Default.
8.
Release of Claims by ▇▇▇▇▇▇▇▇. Except as expressly set forth herein, Borrower on its own behalf and on behalf of each of its respective agents, employees, representatives, affiliates, predecessors-in-interest, heirs, successors, and assigns (such persons and entities other than Borrower are referred to collectively as the “Other Releasors”), releases, discharges and acquits Lender and each of its assignees, members, investors and participants (if any), and each of its respective officers, directors, shareholders, agents, employees, affiliates, successors, and assigns (collectively, the “Released Parties”), of and from any and all rights, claims, demands, obligations, liabilities, indebtedness, breaches of contract, breaches of duty or any relationship, acts, omissions, misfeasance, malfeasance, causes of action, promises, damages, costs, losses and expenses of every kind, nature, description or character which exist or which could or may be claimed to exist, whether known or unknown, suspected or unsuspected, liquidated or unliquidated, claimed or unclaimed, whether based on contract, tort, breach of any duty, or other legal or equitable theory of recovery, each as though fully set forth herein at length (collectively, the “Claims”), which in any way arise out of, are connected with or relate to any or all of the following, existing or occurring as of or prior to the execution of this Agreement: (a) the Loan or the administration of the Loan, as well as any action or inaction of the Released Parties or any of them with respect to the Loan or the administration thereof; (b) any or all of the transactions which are the subject of or contemplated by any or all of the Loan Agreement or other Loan Documents; (c) the Collateral; or (d) any fact, matter, transaction or act or omission by any or all of the Released Parties and relating to the Loan, the Loan Documents, or the Collateral.
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Exhibit 10.21
a.
Waiver. As to all matters being released by Borrower pursuant to this Section 7, Borrower, on its own behalf and on behalf of each of its respective Other Releasors, expressly waive any and all rights under Section 1542 of the California Civil Code and any and all rights under any similar statute, rule or regulation of any state or territory of the United States, and any and all rights under any similar statute, rule or regulation of the United States or any of its agencies. Section 1542 of the California Civil Code provides as follows:
“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THIS RELEASE AND THAT, IF KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY.”
b.
No Assignment. Borrower, on its own behalf and on behalf of each of its respective Other Releasors, warrant and represent to Lender that Borrower and the Other Releasors have not sold, assigned, transferred, conveyed or otherwise disposed of any Claims that are the subject of this Section.
c.
Discovery of Unknown or Different Facts. Borrower on its own behalf and on behalf of each of its respective Other Releasors, acknowledge and agree that the facts with respect to which the release of Claims contained in this Section is executed may hereafter be found to be different from the facts now believed by Borrower to be true, and Borrower on its own behalf and on behalf of each of their respective Other Releasors, expressly accept and assume the risk of such possible differences and agree that the release of Claims contained in this Section shall be and remain effective notwithstanding such differences in facts.
9.
Reaffirmation. Each Grantor agrees as follows:
a.
Such Grantor reaffirms to Lender each of the representations, warranties, covenants, obligations and agreements made by such Grantor as set forth in the Security Agreement executed by it (as amended herein, the Security Agreement) with the same force and effect as if each were separately stated herein and made as of the date hereof, and such Grantor is not relying on the financial condition of Borrower or the value of any and all Collateral as an inducement to enter into this Agreement. This reaffirmation renews and extends the Security Agreement executed by such Grantor in favor of ▇▇▇▇▇▇ and in no way acts as a release or relinquishment of any Security Agreement. Such Grantor has been provided with a copy and has reviewed the Loan Documents and this Agreement and expressly acknowledges, confirms and agrees that the Security Agreement is not affected by this Agreement, except as specifically provided herein.
b.
Such Grantor certifies as of the date hereof that the Security Agreement remains in full force and effect (as amended herein) and enforceable in accordance with its respective terms and there exists no defaults, offsets or defenses thereunder, or any event which with the giving of notice, passage of time, or both would constitute a default, offset or defense thereunder.
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Exhibit 10.21
10.
Effect of Agreement. All of the representations, warranties, terms, and conditions of the Loan Documents remain unaltered and in full force and effect in accordance with their respective terms. ▇▇▇▇▇▇▇▇ acknowledges that it has consulted with counsel and such other experts and advisors as they deem necessary in connection with the negotiation, execution and delivery of this Agreement, or have had an opportunity to so consult and have knowingly chosen not to do so. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto, their respective successors and assigns. No other person shall be entitled to claim any right or benefit hereunder, except the parties hereto.
11.
Severability. In case any provision of this Agreement shall be invalid, illegal, or unenforceable, such provision shall be severable from the remainder of this Agreement and the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
12.
Counterparts; Validity. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which, together, shall constitute one and the same instrument. The failure of any party to execute this Agreement shall have no effect on its validity or enforceability as to or among the other parties.
13.
Entire Agreement. This Agreement and the Loan Documents are intended by the parties as the final expression of their agreement and therefore contain the entire agreement between the parties and supersede all prior understandings or agreements concerning the subject matter hereof. This Agreement may only be amended in a writing signed by ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇.
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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be duly executed and delivered as of the date first above written.
BORROWER:
Heritage Global Inc.,
By: _________________________________ Name: ▇▇▇▇▇ ▇▇▇▇▇
GRANTOR:
Heritage Global Partners Inc.,
By: _________________________________ Name: ▇▇▇▇▇ ▇▇▇▇▇
Heritage Global LLC,
By: _________________________________ Name: ▇▇▇▇▇ ▇▇▇▇▇
a Delaware limited liability company
By: _________________________________ |
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LENDER:
C3bank, National Association
By: ____________________________________ Name: ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇: SVP/Chief Credit Officer
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Signature page to Loan Modification Agreement and
Reaffirmation of Loan
Exhibit 10.21
Name: ▇▇▇▇▇ ▇▇▇▇▇ GRANTOR:
Heritage ALT LLC,
By: _________________________________ Name: ▇▇▇▇▇ ▇▇▇▇▇
Heritage Global Inc.,
By: _________________________________ Name: ▇▇▇▇▇ ▇▇▇▇▇
National Loan Exchange, Inc. an Illinois company
By: _________________________________ Name: ▇▇▇▇▇ ▇▇▇▇▇▇
HG ALT LLC, |
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Signature page to Loan Modification Agreement and
Reaffirmation of Loan
Exhibit 10.21
By: _________________________________ Name: ▇▇▇▇▇ ▇▇▇▇▇
HGPNP, LLC, By: _________________________________ Name: ▇▇▇▇▇ ▇▇▇▇▇
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Signature page to Loan Modification Agreement and
Reaffirmation of Loan