Pledge of
Stock
_____________, referred
to as OWNER, and _____________, referred to as CREDITOR, agree:
OWNER is indebted to
CREDITOR in the sum of $______(________________&___/100 dollars); to secure
repayment of the debt, OWNER pledges to CREDITOR ______ shares of ______ stock
of __________________.
OWNER agrees to execute
all necessary documents to perfect the pledge.
So long as OWNER is
indebted to CREDITOR, the CREDITOR shall have the right to vote the shares.
CREDITOR shall be
entitled to any dividends, and CREDITOR shall credit the debt with the amount
of the dividends collected. CREDITOR may
optionally reinvest the dividends, and any shares so purchased shall be subject
to the pledge.
If OWNER is current in
the obligation underlying this pledge, CREDITOR will release portions of the
pledged stock as follows:
$______(_______________&____/100
dollars) per share.
A copy or copies of the
stock certificate or certificates are attached.
Dated:
_________________________________________
______________________________________________________________
Creditor
______________________________________________________________
Owner
Pledge of Stock
Review List
This review list is provided to inform you about this
document in question and assist you in its preparation. Pledges of stock can be used by creditors to
get more collateral from debtors behind in their obligations. This is an interim step that creditors can
use to protect their interests without unduly upsetting a debtor. From the debtor’s point of view, they are
usually better off liquidating part of their stock in order to pay the creditor
rather than go through all of this. Once
the debtor gives up the stock, then the creditor assumes control over its
liquidation should the debtor continue to be in default or go into default.
- Make multiple copies. Give one to each signatory. As a creditor, be sure to get the actual stock certificate (s) and get the proper paperwork in order in case you need to liquidate them.
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