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Membership Interest Pledge Agreement Template for England and Wales

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Key Requirements PROMPT example:

Membership Interest Pledge Agreement

"I need a Membership Interest Pledge Agreement under English law to secure a £5 million loan, where the pledgor is pledging 60% of their membership interests in a UK tech startup, with completion targeted for March 2025."

Document background
A Membership Interest Pledge Agreement is commonly used in secured financing transactions where membership interests in a company or partnership serve as collateral. This document, governed by English and Welsh law, establishes the security interest over these membership interests, detailing the rights and obligations of both pledgor and pledgee. It typically forms part of a broader security package in financing transactions and must comply with the Financial Collateral Arrangements Regulations and other relevant legislation. The agreement includes provisions for enforcement, voting rights, distributions, and other key aspects of the security arrangement.
Suggested Sections

1. Parties: Identification of pledgor, pledgee, and any other relevant parties

2. Background: Context of the pledge agreement and underlying relationship between parties

3. Definitions: Key terms used throughout the agreement

4. Pledge and Security Interest: Core provisions creating the security interest over the membership interests

5. Representations and Warranties: Pledgor's confirmations regarding ownership and authority

6. Covenants: Ongoing obligations of the pledgor

7. Events of Default: Circumstances triggering enforcement rights

8. Enforcement: Rights and procedures following default

9. Governing Law and Jurisdiction: Choice of law and dispute resolution provisions

Optional Sections

1. Voting Rights: Provisions regarding exercise of voting rights during the pledge period

2. Dividend Rights: Treatment of distributions and dividends on the pledged interests

3. Further Assurance: Obligations to execute additional documents for perfection of security

Suggested Schedules

1. Description of Pledged Interests: Detailed description of the membership interests being pledged

2. Form of Notice: Template notices to be sent to relevant parties regarding the pledge

3. Powers of Attorney: Form of power of attorney granted to pledgee

4. Board Resolutions: Required corporate authorizations

Authors

Alex Denne

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

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Relevant Industries
Relevant Teams
Relevant Roles
Industries

Financial Collateral Arrangements (No. 2) Regulations 2003: Primary legislation governing security arrangements over financial collateral and implementing EU Directive 2002/47/EC on financial collateral arrangements

Companies Act 2006: Key legislation regulating company shares, membership interests, requirements for registration of charges, and filing requirements at Companies House

Law of Property Act 1925: Fundamental legislation establishing basic principles of security interests and requirements for creation and enforcement of security

Insolvency Act 1986: Legislation governing the impact on security interests in insolvency, priority of creditors, and enforcement rights

Financial Services and Markets Act 2000: Regulatory framework applicable when the pledge involves regulated financial activities

Limited Liability Partnerships Act 2000: Legislation specifically governing membership interests in Limited Liability Partnerships

Partnership Act 1890: Historical legislation still relevant for partnership interests and their transfer or pledge

Common Law Principles: Established case law principles regarding creation of security interests, perfection requirements, priority rules, and enforcement rights

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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