Products tagged with 'pledge of shares'

Obtain a pledge of securities from a borrower under this Share Pledge Agreement, pursuant to the provisions of the Ontario Personal Property Security Act.

• A borrower pledges shares of stock to a lender, to be held as security for a loan that the lender is making to the borrower.
• The borrower agrees to pledge any additional, substitute or replacement shares issued in its name.
• The borrower retains the right to vote the shares.
• The agreement contains a limitation on personal liability clause with respect to the borrower's responsibility for any deficiency owing after disposition of the shares.
• This form is a fully customizable legal template that you can use as often as you need to.
• Intended for use only in the Province of Ontario, Canada.

Prepare a Share Pledge Agreement with No Recourse with this customizable template form for Ontario lenders.

This Share Pledge Agreement is intended to provide a lender with security from a corporate borrower in the Province of Ontario, Canada. It is compliant with the provisions of the Ontario Personal Property Security Act and is available in MS Word format.

Parties Involved

• Borrower: A corporate entity who is borrowing the funds and has issued the shares to the shareholder.
• Shareholder: The individual or entity who is pledging the shares of stock, and is a principal or stakeholder in the corporate borrower.
• Lender: The party providing the loan to the borrower.

Pledge of Shares

The shareholder pledges the shares to the lender. These shares are to be held as security for a loan that the lender is making to the borrower.

Additional Shares

The shareholder agrees to pledge any additional, substitute, or replacement shares issued in its name, ensuring that the security remains intact throughout the term of the loan.

Retention of Voting Rights and Dividends

So long as the borrower is not in default under the loan:

• the shareholder will retain the right to vote the shares that have been pledged at shareholder meetings, allowing the shareholder to continue participating in corporate decisions, and
• any dividends accruing to the shareholder will be payable to the account of the shareholder.

No Recourse Provision

In the event of a shortfall between the balance of the debt owing and any proceeds realized from dealing with the shares, the shareholder shall have no liability for such shortfall. The lender has no recourse against the shareholder for any deficiency in the repayment of the loan.

Non-Guarantee Status

The shareholder is not a guarantor, surety, or indemnifier with respect to the loan. Its only obligation is the pledge of shares as security.

Purpose of Document

When securing a loan with shares of stock, the borrower is required to sign a pledge of the shares. This form establishes that the lender will hold the shares as collateral to guarantee repayment of a promissory note.

Lender's Rights and Restrictions

The lender is granted the authority to instruct the issuing company to transfer the ownership of the pledged shares into the lender’s name on the company’s records. However, the lender is not permitted to sell, encumber, or collect dividends on the shares while they are held as security.

Borrower's Rights

The borrower retains the right to vote the shares, provided that he or she is not in default under the terms of the promissory note.

Release of Shares

Once the loan is fully repaid, the shares will be transferred back to the borrower.

Availability of Form

The Pledge of Shares form will download immediately following purchase. This document can be used throughout the United States.