A Membership Interest Pledge Agreement is an agreement between an owner of shares
and a lender. The owner/pledgor pledges a membership interest as security for the
payment and performance of the owner's repayment of debt to the lender. This
document supplies standard terms in the event of default and the remedies of each
party. The pledgor also makes certain representations and warranties and further
agrees to certain covenants regarding the pledge of membership interests. This
document can be customized to fit the needs of the drafting parties.
LLC MEMBERSHIP INTEREST PLEDGE AGREEMENT
THIS MEMBERSHIP INTEREST PLEDGE AGREEMENT (the "Agreement")
made this ____ day of _________, 2_____ (the â€œEffective Dateâ€) by and between
_______________ (the â€œPledgorâ€) and _________________ (the â€œLenderâ€).
WHEREAS, the Pledgor is indebted to the Lender in the principal amount of
___________ ($_________) Dollars as evidenced by ___________________ (the â€œLoan
Agreementâ€) a copy of which is annexed hereto as Schedule â€œA.â€
AND WHEREAS, the Pledgor is the registered and beneficial owner of __________
(____%) percent membership interests in ________________________ (the â€œMembership
AND WHEREAS, as security for the indebted owing to the Lender and the performance
of the Pledgor obligations under the Loan Agreement, the Pledgor shall grant to the Lender a
security interest in the Pledgorâ€™s Membership Interests.
NOW, THEREFORE, in consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, Pledgor agrees
with Lender as follows:
1.01 (a) "Lien" shall mean any mortgage, security instrument, pledge, security interest,
assignment, encumbrance, judgment, lien, claim or charge of any kind in, on, of or in respect of,
any asset or property or any rights to any asset or property, including, without limitation, (i) any
interest of a vendor or lessor under any conditional sale agreement, capital lease or other title
retention agreement relating to any such asset or property, and (ii) the filing of, or any agreement
to give, any financing statement relating to any such asset or property under the Uniform
Commercial Code of any jurisdiction.
(b) "Obligations" shall mean the full and punctual payment and performance, when
due (whether at stated maturity, upon acceleration or otherwise), of any and all present and
future indebtedness, liabilities and obligations of every kind and nature of the Pledgor to the
Lender, howsoever created, arising or evidenced, whether direct or indirect, absolute or
contingent, joint or several, both now and hereafter existing, or due or to become due, arising
under, out of, as a result of, or in connection with the Loan Agreement.
(c) "Person" means and includes an individual, a corporation, a partnership, a joint
venture, a trust, an unincorporated association, a limited liability company, government or
political subdivision or agency thereof, or any other entity.
(d) "UCC" means the Uniform Commercial Code, as amended from time to time.
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2.00 MEMBERSHIP INTEREST PLEDGE
2.01 The Pledgor hereby pledges, assigns and transfers to the Lender a security interest in and
to the Membership Interests of the Pledgor in ___________________.
2.02 The Pledgor hereby further pledges, assigns and transfers to the Lender a security interest
in and to:
(i) any certificates or documents representing the Membership Interests owned by the
(ii) any and all payments or principal and interest made to the Pledgor in respect of
the Membership Interests.
2.03 The Pledgor shall deliver to the Lender all of the certificates and documents representing
the Membership Interests owned by the Pledgor upon the Effective Date of this Agreement,
which certificates and documents shall be duly endorsed to the Lender.
2.04 The security interest granted to the Lender by the Pledgor in respect of the Membership
Interests is for security only and is not subject to the Lender transferring or in any way
modifying the obligations of the Pledgor in respect to the Membership Interests.
2.05 The Pledgor hereby agrees that the Lender may, at its own discretion, hold the certificates
or documents representing the Membership Interests in its own name or the name of the Pledgor.
2.06 The Lender hereby agrees that the Pledgor shall be entitled to exercise any and all voting
rights or other rights that may be associated with the Membership Interests provided that such
action will not materially and adversely affect the right and remedies of the Lender under this
Agreement or the Loan Documents or the rights of the Lender to exercise the same.
3.00 EVENTS OF DEFAULT