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Share Security Agreement for Philippines

Share Security Agreement Template for Philippines

A comprehensive legal document governed by Philippine law that establishes and evidences a security interest over shares of stock. This agreement sets out the terms and conditions under which shares are pledged as collateral for a loan or other obligations, including the rights and obligations of both the pledgor and pledgee, enforcement mechanisms, and compliance requirements under Philippine securities and corporate laws. The document incorporates specific provisions required by Philippine regulations, including those under the Revised Corporation Code and Securities Regulation Code, and addresses local perfection and registration requirements.

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What is a Share Security Agreement?

The Share Security Agreement is a crucial document in Philippine secured financing transactions, used when a party wishes to pledge shares as collateral for financial obligations. This agreement is particularly important in corporate lending, acquisitions, and investment scenarios where shares serve as security. The document must comply with Philippine law requirements, including the Revised Corporation Code, Securities Regulation Code, and Personal Property Security Act. It details the creation and perfection of the security interest, voting rights arrangements, dividend treatments, and enforcement mechanisms. The agreement becomes especially relevant in corporate restructuring, project financing, or when companies seek to secure additional funding using their shareholdings as collateral. The document must address specific Philippine law requirements regarding share transfers, foreign ownership restrictions (if applicable), and corporate governance considerations.

What sections should be included in a Share Security Agreement?

1. Parties: Identification of the Pledgor (shareholder/security provider) and Pledgee (security taker/lender), including their complete legal names and addresses

2. Background: Context of the security arrangement, including reference to any underlying loan or facility agreement

3. Definitions and Interpretation: Definitions of key terms used in the agreement and rules of interpretation

4. Creation and Grant of Security Interest: Express creation of the security interest over the shares, including the pledge and its scope

5. Secured Obligations: Definition of the obligations being secured by the share pledge

6. Perfection Requirements: Steps required to perfect the security interest under Philippine law, including registration requirements

7. Representations and Warranties: Pledgor's representations regarding ownership, authority, and status of shares

8. Covenants: Ongoing obligations of the Pledgor regarding the secured shares

9. Voting Rights and Dividends: Provisions governing exercise of voting rights and receipt of dividends pre and post-default

10. Events of Default: Circumstances constituting default under the agreement

11. Enforcement: Rights and remedies of the Pledgee upon default, including power of sale

12. Power of Attorney: Appointment of the Pledgee as attorney-in-fact for enforcement purposes

13. Miscellaneous: Standard provisions including notices, amendments, governing law, and jurisdiction

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

1. Security Margin: Used when the agreement requires maintenance of a specific collateral value ratio

2. Further Advances: Include when the security may cover future additional loans or facilities

3. Tax Provisions: Detailed tax provisions when complex tax implications are anticipated

4. Foreign Exchange Provisions: Required when the transaction involves foreign currency considerations

5. Corporate Restrictions: Special provisions dealing with corporate ownership restrictions or requirements

6. Release and Discharge: Detailed provisions for partial releases when managing multiple share pledges

What schedules should be included in a Share Security Agreement?

1. Schedule 1 - Details of Secured Shares: Specific details of the pledged shares including certificate numbers, number of shares, and class

2. Schedule 2 - Form of Notice to Company: Template notice to be sent to the company whose shares are being pledged

3. Schedule 3 - Form of Acknowledgment: Template acknowledgment from the company regarding the share pledge

4. Schedule 4 - Perfection Requirements: Detailed list of all registrations and filings required under Philippine law

5. Schedule 5 - Form of Stock Transfer Form: Pre-signed stock transfer forms for enforcement purposes

6. Appendix A - Board Resolutions: Form of corporate authorizations required from the Pledgor

7. Appendix B - Specimen Signatures: Authorized signatures of the parties for documentation purposes

Authors

Alex Denne

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

Jurisdiction

Philippines

Publisher

Ƶ

Document Type

Security Agreement

Cost

Free to use
Relevant legal definitions












































Clauses




































Relevant Industries

Banking

Financial Services

Investment Management

Corporate Services

Private Equity

Venture Capital

Manufacturing

Real Estate

Technology

Retail

Energy

Infrastructure

Professional Services

Relevant Teams

Legal

Finance

Corporate Secretarial

Compliance

Risk Management

Corporate Finance

Treasury

Investment

Securities Administration

Relevant Roles

Legal Counsel

Corporate Lawyer

Finance Director

Chief Financial Officer

Investment Manager

Corporate Secretary

Compliance Officer

Security Trustee

Transaction Manager

Risk Manager

Commercial Director

Chief Legal Officer

Investment Banker

Corporate Finance Manager

Securities Officer

Industries







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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