Pledge Security Agreement for the United States

Pledge Security Agreement Template for United States

A Pledge Security Agreement is a legal document governed by U.S. law, primarily Article 9 of the Uniform Commercial Code, that creates and evidences a security interest in specified assets (collateral) to secure the performance of an obligation. The agreement details the pledgor's grant of security interest, representations and warranties, maintenance obligations, and the pledgee's rights and remedies upon default. It includes specific provisions for perfection of the security interest and compliance with applicable state and federal regulations.

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What is a Pledge Security Agreement?

The Pledge Security Agreement is a crucial document in secured financing transactions under U.S. law. It is used when a party needs to provide security for a loan or other obligation by pledging specific assets as collateral. The agreement must comply with Article 9 of the Uniform Commercial Code and applicable state laws to ensure enforceability and proper perfection of the security interest. A well-drafted Pledge Security Agreement includes detailed descriptions of the collateral, clear terms for maintaining and protecting the pledged assets, and specific remedies available upon default. It's particularly important in commercial lending, corporate finance, and investment transactions where lenders require security for their extensions of credit.

What sections should be included in a Pledge Security Agreement?

1. Parties: Identification of pledgor and pledgee, including legal names and addresses

2. Background/Recitals: Context of the pledge agreement and underlying obligations being secured

3. Definitions: Key terms used throughout the agreement, including 'Collateral', 'Secured Obligations', 'Event of Default'

4. Grant of Security Interest: Formal pledge and grant of security interest in the collateral

5. Representations and Warranties: Pledgor's statements regarding ownership, authority, and status of collateral

6. Covenants: Ongoing obligations of the pledgor regarding maintenance and protection of collateral

7. Events of Default: Circumstances constituting default and triggering enforcement rights

8. Remedies: Rights and actions available to pledgee upon default

What sections are optional to include in a Pledge Security Agreement?

1. Control Agreements: Required when collateral includes financial assets or deposit accounts - provisions for establishing control over financial assets

2. Voting Rights: Provisions regarding exercise of voting rights for pledged securities - required when collateral includes corporate securities

3. Insurance Requirements: Provisions for maintaining insurance on collateral - required when collateral includes physical assets requiring insurance

4. Intercreditor Provisions: Rules governing relationship between multiple secured parties - required when multiple secured parties exist

What schedules should be included in a Pledge Security Agreement?

1. Schedule of Collateral: Detailed description of pledged assets

2. UCC Financing Statements: Forms for perfecting security interest

3. Stock Powers: Transfer documents for pledged securities - required when collateral includes certificated securities

4. Control Agreement Forms: Forms for establishing control over financial assets - required when collateral includes financial accounts

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

United States

Publisher

Genie AI

Document Type

Security Agreement

Cost

Free to use
Industries

Uniform Commercial Code (UCC): Primary legislation governing secured transactions, particularly Article 9. Covers creation, perfection, and enforcement of security interests, filing requirements, and priority rules. Must consider state-specific UCC variations.

Federal Securities Laws: Including Securities Act of 1933 and Securities Exchange Act of 1934, along with SEC regulations. Relevant when the pledged collateral includes securities.

State Security Interest Laws: State-specific requirements governing the creation and perfection of security interests, including local filing requirements and procedures.

Federal Banking Regulations: Federal Reserve regulations and banking laws pertaining to secured transactions, particularly relevant when the transaction involves financial institutions.

Bankruptcy Code: Federal bankruptcy laws affecting secured transactions, including automatic stay provisions, perfection requirements, and priority rules in bankruptcy proceedings.

Federal Tax Lien Act: Legislation governing priority rules regarding tax liens and IRS requirements in secured transactions.

State Corporate Laws: State-specific corporate legislation governing authority to pledge assets and corporate governance requirements for secured transactions.

Uniform Electronic Transactions Act: Legislation governing electronic execution and recording of secured transactions, relevant when electronic execution is contemplated.

Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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