Pledge Agreement (Pledge of Shares in Borrower) (Shareholders) (Short Form)

Summary

This precedent is a short form pledge agreement to be executed by a shareholder of the borrower in a secured loan transaction. It creates a security interest in the shares and other equity interests of the borrower that have been issued to its shareholder ("pledgor"). This precedent sets out general obligations, terms and conditions for which the security interest is granted, and contains various representations, warranties, covenants, and provisions relating to the secured collateral. This precedent includes practical guidance, drafting notes, alternate clauses and optional clauses. A Pledge Agreement is a contract between a lender (e.g., a bank) and a borrower or pledgor executed to secure loans, credit facilities, and other obligations owed to a lender whereby the borrower or pledgor typically pledges shares or other securities and creates a security interest over such assets. A pledge establishes a security under which the pledgee has actual or constructive possession of the ...