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1. Parties. Agreement made [date] between [name] of [address] (Borrower) and [name], a [state] corporation having an office at [address] (Lender).
2. Collateral and Grant of Security Interest. Borrower grants Lender a security interest in the following stocks, bonds, and other securities, as well as the proceeds of such items (the Collateral):
[description of collateral]
3. Description of Obligation Secured. The security interest granted by this Instrument secures an indebtedness owed by Borrower to Lender in the principal sum of ........ dollars ($........) with interest at the rate of ........ percent (........%) per annum, payable on [date], evidenced by a promissory note of [date], signed by Borrower, and delivered to Lender on that date.
4. Delivery of Collateral. Borrower has, simultaneously with the signing of this Agreement, delivered the Collateral to Lender, together with stock powers signed in blank by Borrower and all other properly signed instruments that may be needed by Lender to sell or transfer the Collateral or any part of it.
4. Delivery of Collateral to Lenders. Borrower will deliver the Collateral to Lender no later than [number] days from the date of this Instrument, together with stock powers signed in blank by Borrower and all other properly signed instruments that may be needed by Lender to sell or transfer the Collateral or any part of it. Pending delivery of the Collateral, Borrower will hold the Collateral in trust for Lender, separate and distinct from Borrower's other property.
5. Borrower's Representation. Borrower owns the Collateral free of any claim by any third party. No one except Borrower and Lender has any ownership or security interest in the Collateral.
6. Borrower's Rights Prior to Default. Borrower has the right to vote the stock representing the Collateral, collect all dividends paid on the Collateral, and otherwise exercise all rights of the owner of the Collateral (except as limited by this Agreement) prior to any default under this Agreement.
7. Borrower to Help Maintain Valid Security Interest in Lender. Borrower shall do such acts as Lender may reasonably require from time to time to maintain a valid security interest in the Collateral in Lender, free of all other liens and claims, to secure payment of Borrower's indebtedness to Lender.
8. Default. Lender may dispose of the Collateral if any of the following events occur:
a. Borrower fails to pay any amount payable to Lender on the due date plus any applicable grace period; or
b. Borrower is otherwise in default under this Agreement or any agreement signed in connection with the indebtedness described in Paragraph 3.
9. Rights and Obligations After Default.
a. Notice of Disposition of Collateral. If any notification of an intended disposition of any of the Collateral is required by law, such notification shall be deemed reasonably and properly given if mailed at least [number] days before the disposition, postage prepaid, addressed to Borrower at the address shown in Paragraph 1.
b. Expenses of Disposition. Borrower agrees to pay Lender all expenses (including reasonable attorney fees) Lender incurs in disposing of the Collateral after Borrower's default.
10. Return of Collateral. Promptly after payment in full of all sums due to Lender in connection with the indebtedness described in Paragraph 3, Lender will return the Collateral to Borrower.
11. No modification of this Agreement will be effective unless it is in writing and is signed by both parties. Time is of the essence of this contract. This Agreement binds and benefits both parties and any successors. This document, including any attachments, is the entire agreement between the parties.
12. Arbitration. Any disputes pertaining to said contractual arrangement being affairs that cannot be settled amicably shall be submitted to an arbitrator under the Rules of the American Arbitration Association or like organization in the City of [city], whose award may be reduced to judgment in any court of competent jurisdiction.
13. Severability. If any provision of this Agreement shall be held to be invalid or unenforceable for any reason, the remaining provisions shall continue to be valid and enforceable. If a court finds that any provision of this Agreement is invalid or unenforceable, but that by limiting such provision it would become valid or enforceable, then such provision shall be deemed to be written, construed, and enforced as so limited.
14. Waiver Of Agreementual Right. The failure of either party to enforce any provision of this Agreement shall not be construed as a waiver or limitation of that party's right to subsequently enforce and compel strict compliance with every provision of this Agreement.
15. No Representations. Neither party has made any representations nor promises, other than those contained in this agreement or in some further writing signed by the party making the representation or promise.
16. Interpretation. This Agreement will in all events be construed as a whole, according to its fair meaning, and not strictly for or against a party merely because that party (or the party's legal counsel) drafted the Agreement. The headings, captions, and titles in this legal Agreement are merely for reference and do not define, limit, extend, or describe the scope of this Agreement or any provision herein. Unless the context requires otherwise,
(a) the gender (or lack of gender) of all words used in this Agreement includes the masculine, feminine, and neuter, and
(b) the word including means including without limitation.
17. Advice Of Legal Counsel. Each individual party to this Agreement represents and warrants to each other party that such party has read and fully understands the terms and provisions hereof, has had an opportunity to review this Agreement with legal counsel, and has executed this Agreement based upon such party's own judgment and advice of independent legal counsel.
18. Invalid Provisions. If any provision of this Agreement is held to be illegal, invalid, or unenforceable under any present or future law, then that provision will be fully severable. This Agreement will be construed and enforced as if the illegal, invalid, or unenforceable provision had never comprised a part of this Agreement, and the remaining provisions of this Agreement will remain in full force and effect and will not be affected by the illegal, invalid, or unenforceable provision or by its severance from this Agreement. Furthermore, in lieu of each such illegal, invalid, or unenforceable provision, there will be added automatically, as a part of this Agreement, a provision as similar in terms to such illegal, invalid, or unenforceable provision as may be possible and be legal, valid and enforceable.
19. Notices. Any notice to be given or to be served upon any party hereto must be in writing and may be given by certified or registered mail, but shall be deemed to have been given and received when a certified or registered letter containing such notice, properly addressed with postage prepaid, is deposited with U.S. Mail. If notice is given in some manner other than by certified or registered mail, it shall be deemed to have been given when delivered to and received by the party to whom it is addressed, Such notices shall be given to the parties hereto at the following addresses:
If to the [Lender]:
[city, state, zip]
If to the [Borrower]:
[city, state, zip]
All such notices and communications shall be deemed to have been duly given when delivered by hand, if personally delivered; (--) business days after deposit in any United States Post Office, postage prepaid, if mailed; when answered back, if faxed; and when receipt is acknowledge. Any party hereto may change its address for purposes of this paragraph by written notice given in the manner provided above.
20. Failure to Object Not a Waiver. The failure of a party to object to, or to take affirmative action with respect to, any conduct of the other which is in violation of the terms of this Agreement shall not be construed as a waiver of the violation or breach or of any future violation, breach, or wrongful conduct until (--) days since the wrongful act or omission to act has passed.
21. Unenforceable Terms. Any provision hereof prohibited or unenforceable under any applicable law of any jurisdiction shall as to such jurisdiction be ineffective without affecting any other provision of this Agreement. To the full extent, however, that the provisions of such applicable law may be waived, they are hereby waived to the end that this Agreement be deemed to be a valid and binding agreement enforceable in accordance with its terms.
22. Execution In Counterparts. This Agreement may be executed in several counterparts and when so executed shall constitute shall constitute one agreement binding on all the parties, notwithstanding that all the parties are not signatory to the original and same counterpart.
23. Incorporation By Reference. All exhibits referred to in this Agreement are incorporated herein in their entirety by such reference.
24. Cross-References. All cross-references in this Agreement, unless specifically directed to another agreement or document, refer to provisions in this Agreement, and shall not be deemed to be references to any overall transaction or to any other agreements or documents.
25. Miscellaneous Provisions. The various headings and numbers herein and the grouping of provisions of this Agreement into separate divisions are for the purpose of convenience only and shall not be considered a part hereof. The language in all parts of this Agreement shall in all cases be construed in accordance to its fair meaning as if prepared by all parties to the Agreement and not strictly for or against any of the parties.
26. Further Assurances. In connection with this Agreement and the transactions contemplated hereby, each party to this Agreement will execute and deliver any additional documents and perform any additional acts that may be necessary or appropriate to effectuate and perform its obligations under this Agreement and the transactions contemplated hereby.
27. Entire Agreement. This Agreement contains the entire agreement of the parties and there are no other promises or conditions in any other agreement whether oral or written. This Agreement supersedes any prior written or oral agreements between the parties.
28. Governing Law. Borrower and Lender's rights, duties, and obligations under this Agreement shall, unless otherwise required by the laws of [state], be governed by the provisions of the Uniform Commercial Code of [state], as in effect from time to time.
This Section for Notary:
STATE OF -------)
) ss: [date]
COUNTY OF ------)
On [Date] before me, [Name of Notary], notary, personally appeared [Name of Person(s) Involved], personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
Witness my hand and official seal.
[Name of Notary Public]
My commission expires: [date]