Promissory Note and Pledge Agreement regarding loan and grant of security interest in shares of the company's common stock
What this document covers
The Promissory Note and Pledge Agreement is a legal document that facilitates a loan between a borrower and a lender, allowing the lender to secure their loan by obtaining a security interest in the borrower's shares of common stock in a company. This form differs from other financial agreements by including a pledge of shares as collateral, providing additional security for the lender in the event of default.
Main sections of this form
- Principal amount: Specifies the amount of the loan provided.
- Maturity date: Indicates when the loan is due for repayment.
- Interest rate: Details the annual interest charged on the unpaid principal.
- Events of acceleration: Lists conditions under which the lender can demand immediate repayment.
- Security interest: Outlines the borrower's pledge of company shares as collateral for the loan.
- Waivers: Includes waivers of certain rights regarding demand and protest for non-payment.
When to use this document
This form is useful when an individual or entity needs to borrow money and is willing to offer company shares as collateral. It is typically employed in business transactions where a company seeks to secure financing, and the lender requires additional assurance of repayment through a pledge of stock. Use this form when clear terms of repayment and interest are necessary, especially in scenarios involving employment relationships or risk of default.
Who should use this form
Individuals or entities who should consider using this form include:
- Borrowers seeking a loan from a corporation.
- Lenders requiring security for a loan in the form of company stock.
- Business owners wanting to formalize a loan agreement with a pledge of shares.
- Individuals engaged in business transactions involving equity financing.
Completing this form step by step
- Identify the parties involved: Clearly specify the lender (iPrint, Inc.) and the borrower (James P. McCormick).
- Specify the loan details: Enter the loan amount, interest rate, and maturity date.
- Describe the pledged collateral: List the number and type of shares being pledged.
- Include acceleration clauses: Detail conditions under which the lender can demand early repayment.
- Sign and date the document: Ensure both parties sign and date the agreement for validation.
Is notarization required?
This form does not typically require notarization to be legally valid. However, some jurisdictions or document types may still require it. US Legal Forms provides secure online notarization powered by Notarize, available 24/7 for added convenience.
Avoid these common issues
- Failing to clearly define the terms of repayment and interest.
- Not including all required signatures, leading to potential enforceability issues.
- Omitting details about the secured collateral or misidentifying it.
Why use this form online
- Convenience: Easily accessible and downloadable for quick use.
- Editability: Allows users to customize terms to fit their specific agreement needs.
- Reliability: Templates are drafted by licensed attorneys, ensuring legal validity.
Form popularity
FAQ
Noun. a solemn promise or agreement to do or refrain from doing something: a pledge of aid; a pledge not to wage war. something delivered as security for the payment of a debt or fulfillment of a promise, and subject to forfeiture on failure to pay or fulfill the promise.
Any pledge of or grant of a security interest to the Lender in any property or asset of any kind, now or hereafter executed by any Third Party Pledgor to secure any or all of the Obligations, and all extensions, renewals, modifications and replacements of any or all of such documents (collectively, the Third Party
Filters. (US, dated) To promise to abstain from alcohol. verb.
An agreement typically used to create a security interest in equity interests (including capital stock, LLC interests, and partnership interests) and promissory notes. Under the UCC, a pledge agreement is a security agreement.
Noun. a solemn promise or agreement to do or refrain from doing something: a pledge of aid; a pledge not to wage war.
To make a serious or formal promise to give or do something:So far, £50,000 has been pledged (= people have promised to pay this amount) in response to the appeal. + to infinitive Both sides have pledged to end the fighting. I've been pledged to secrecy.
The definition of a pledge is something held as security on a contract, a promise, or a person who is in a trial period before joining an organization. An example of a pledge is a cash down payment on a car. An example of a pledge is a promise that you'll buy a person's car.
13.2 No Liens; Other Financing Statements. (a) The Pledgor is the legal and beneficial owner of, and has good and marketable title to, the Pledged Collateral.The Pledgor has the power and authority to pledge and assign all of the Collateral pursuant to this Agreement.
A pledged asset is collateral held by a lender in return for lending funds. Pledged assets can reduce the down payment that is typically required for a loan as well as reduces the interest rate charged. Pledged assets can include cash, stocks, bonds, and other equity or securities.