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Stock Pledge
STOCK PLEDGE
THIS AGREEMENT made this [Date of agreement], by and between [Name of husband and wife], husband and wife, having an address at [Address of husband and wife], hereinafter referred to as the "Pledgor", and [Name of Pledgee], whose address is [Address of Pledgee], hereinafter referred to as the "Pledgee".
WITNESSETH: WHEREAS, the pledgor is duly indebted to the pledgee in the aggregate principal amount of $ [Principal amount] dollars evidenced by a promissory note of the pledgor dated [Date of Note], hereinafter referred to as the "Note"; and
WHEREAS, to induce the Pledgee to loan to the Pledgor the principal amount of the Note, the Pledgor has agreed to pledge all of their shares of [Name of Corporation], Inc., as security for the prompt payment of the Note in accordance with its terms.
NOW, THEREFORE, intending to be legally bound hereby, the parties agree as follows:
1. In consideration of the foregoing, the Pledgor herewith pledges, delivers and assigns to the Pledgee all of their shares of [Name of Corporation] Inc., duly endorsed in blank, and does hereby appoint the Pledgee, or its nominee, the Pledgor's true and lawful attorney and in its name, place and stead to cause the shares of [Name of Corporation], Inc., to be transferred on the books of the corporation to the name of the Pledgee.
2. The Pledgor does hereby represent and warrant:
(a) That, except as pledged herein, the Pledgor has not sold, assigned, transferred, pledged, granted any security interest in or otherwise hypothecated the shares of stock of Inc., in any manner whatsoever and that the shares of stock of [Name of Corporation] Inc., are pledged herewith free and clear of any and all liens, encumbrances, pledges, restrictions, security interests and agreements; and
(b) That the Pledgor has full power and authority to execute and deliver this pledge agreement and to pledge the shares of stock of [Name of Corporation], Inc., hereunder, that this agreement constitutes the valid and binding obligation of the Pledgor enforceable in accordance with its terms, and that the pledge of the shares of stock of [Name of Corporation], Inc. contained herein is not in violation of any agreement, undertaking or obligation of the Pledgor.
(c) Pledgee shall hold the shares of stock of [Name of Corporation], Inc., as security for the payment of the Note and will not at any time dispose of or encumber the same except as herein provided. While the Pledgee is the holder of the shares of stock of [Name of Corporation], Inc., it shall not collect dividends thereon and the Pledgor shall have the right to cast any vote of the same at meetings of stockholders of the corporation, at which said stock may be entitled to vote so long as an Event of Default, herein set forth, has not occurred and, if the Pledgee has exercised its right to have the shares of stock of [Name of Corporation], Inc., in its name as aforesaid, the Pledgee agrees to execute any and all proxies in favor of the Pledgor that may be required. Upon the payment of the Note in full, the Pledgee shall retransfer or redeliver the shares of stock of [Name of Corporation], Inc., to the Pledgor.
4. Upon the occurrence of an Event of Default herein defined, the Pledgee is hereby granted all of the rights and remedies accorded a secured party under the Uniform Commercial Code and may, upon [Days of notice] days prior written notice to the Pledgor, sell, lease or otherwise dispose of the shares of stock of [Name of Corporation], Inc., pledged hereunder, at any time or from time to time, in whole or in part, at public or private sale, without advertisement or notice of sale, all of which are hereby waived, and apply the proceeds of any such sale (a) first to the expenses of holding, preparing the collateral for sale, in arranging for the sale, selling and the like, including without limitation reasonable attorney fees and legal expenses incurred by the Pledgee [including fees and expenses of any litigation incident to any of the foregoing]; (b) second to the payment of the Note and all interest accrued thereon; and (c) shall pay any excess to the Pledgor.
In the event that the proceeds of any such sale are not sufficient to pay the items listed in (a) and (b) above, then the Pledgor shall remain liable and shall pay the Pledgee any such deficiency. Any purchaser at any such sale [which term shall include the Pledgee in the case of a public sale] shall receive the shares of stock of all rights of redemption or other rights or claims of the Pledgor, all of which are hereby waived.
An Event of Default hereunder is defined as:
(a) The nonpayment of any installment due and owing on the Note when it has become due;
(b) The adjudication of the Pledgor as a bankrupt or insolvent, or entry of any order, remaining unstayed by appeal or otherwise for twenty (20) days, appointing a receiver or trustee for the Pledgor or for all or any of the Pledgor's properties, or the filing by or against the Pledgor of a petition seeking any of the foregoing or consenting thereto, or the filing of a petition to take advantage of any debtors' act, or making a general assignment for the benefit of creditors or admitting in writing inability to pay debts as they may mature.
5. This is the entire agreement between the parties hereto and may be changed only by a written instrument signed by the party against whom any charge is sought to be enforced.
6. This agreement is made in and shall be governed by and construed in accordance with the laws of the State of [State of Jurisdiction].
7. This agreement shall be binding upon and inure to the benefit of the parties hereto, their respective heirs, personal representatives, successors and assigns.
IN WITNESS WHEREOF, the Pledgor, intending to be legally bound hereby, has executed this agreement the day and year first above written.
Signature Date
WITNESS: