What changed in this filing

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Item 5. Other Information

2021-05-13 compared with 2020-11-09 · 30 added, 10 removed, 26 unchanged (61% of the section changed)

Other Information.

New Credit Facility

On May 11, 2021, the Company entered into a promissory note, business loan agreement, commercial security agreement and pledge agreement (the “ New Credit Facility ”) with C3bank, National Association for a $10.0 million revolving line of credit.

The New Credit Facility matures on May 11, 2023 and replaces the Credit Facility.

The Company is permitted to use the proceeds of the loan solely for its business operations.

The New Credit Facility accrues at a variable interest rate, which is based on the rate of interest last quoted by The Wall Street Journal as the “prime rate,” plus a margin of 1.70% (such rate not to be less than 4.950% per annum).

The Company will pay interest on the New Credit Facility in regular monthly payments, beginning on June 11, 2021.

The New Credit Facility also provides for a minimum fee, which is offset by interest payments.

The Company may prepay the New Credit Facility without penalty and may convert up to $5.0 million of revolving debt into term debt.

The Company is the borrower under the New Credit Facility.

The New Credit Facility is secured by a security interest in certain of the Company’s and its certain subsidiaries’ current and future tangible and intangible assets, inventory, chattel paper, accounts, equipment and general intangibles and a pledge of the equity of the direct and indirect subsidiaries of the Company.

The availability of additional draws under the New Credit Facility is conditioned, among other things, on the compliance with certain customary representations and warranties, including default, insolvency or bankruptcy, material adverse change in financial condition and any guarantor’s attempt to revise its guarantee.

The agreement governing the New Credit Facility also contains customary affirmative covenants regarding, among other things, the maintenance of records, maintenance of certain insurance coverage, compliance with governmental requirements and maintenance of several financial covenants.

The New Credit Facility contains certain customary financial covenants and negative covenants that, among other things, include restrictions on the Company’s ability to create, incur or assume indebtedness for borrowed money, including capital leases or to sell, transfer, mortgage, assign, pledge, lease, grant a security interest in, or encumber any of the Company’s assets.

On May 11, 2021, the Company terminated the Credit Facility as a result of entry into the New Credit Facility.

A description of the material terms and conditions of the Credit Facility are included in the “ Liquidity and Capital Resources—Liquidity ” section of Part I, Item 2 contained in this Quarterly Report on Form 10-Q.

This summary is qualified in its entirety by reference to the full text of the promissory note, business loan agreement, and commercial security agreement, which are attached hereto as Exhibit 10.2, 10.3, and 10.4, respectively, and incorporated by reference herein.

Identification of Exhibit

6 unchanged sentences

000-17973), and incorporated herein by reference).

Employment Agreement, dated September 17, 2020, by and between Global Heritage Inc.

and Kirk Dove (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on September 21, 2020 (File No.

001-39471), and incorporated herein by reference).

Amendment to Stock Option Award, dated September 20, 2020, by and between Global Heritage Inc.

and Kirk Dove (filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on September 21, 2020 (File No.

001-39471), and incorporated herein by reference).

Separation Agreement, dated March 30, 2021, by and between Heritage Global Inc.

and Scott West

Business Loan Agreement, dated May 11, 2021, by and between Heritage Global Inc.