Second Ranking Pledge Agreement

At the time of execution, the pawnbroker owes the pfandgor the obligation to account for the surpluses achieved. However, the pawnbroker is required to act reasonably and, if imposed by the sale to another party, he is required to obtain the best possible price. However, an obligated is not obliged to wait for conditions to improve. The “best possible price” is the best price available on the day of the application. If the shares are listed, this is obviously the average price of the day. In the case of a private company, this is the best price the Pledgee could reasonably receive – that is, the price a willing buyer is willing to pay. c) The interests of the infirme are protected by a set of common law and just principles developed by the jurisprudence. Among other things, the pawnbroker must be subject to the obligations in the event of the sale of the mortgaged shares: in addition to this, it is also necessary to ensure that (i) the Pfandgor has the ability to undertake to conclude the corresponding pawn contract, (ii) has taken all the necessary decisions of the company to approve it; (iii) has entrusted a specific person with the implementation of the pawn contract and (iv) is reputable and solvent. For example, the existence of a liquidation petition against the Pledgor, provided that the Pledgor is a company in Cyprus, at the time of the execution of the consignment agreement renders the collateral invalid, unless a court order to validate the transaction.

(iii) Executing the decision of the board of directors and the company whose shares are pledged to authorize the transfer of the shares. Under the FCL, the pawnbroker is authorized, following an enforcement event, to contract the mortgaged shares and to value their value with the corresponding financial obligations of the pawnbroker, without having to apply for an order from the court. However, it is noted that in cases where the application of the FCL is applicable, it is only permitted if the parties have expressly agreed to it in the corresponding share filing agreement and the parties have agreed on the method of assessing the mortgaged assets. (The draft documents mentioned above are generally included as annexes in the share concession agreement, so the format and content of the documents are agreed between the parties (the “appendices”). By definition, a pledge is an interest in the security of the property and therefore involves the provision of real or constructive goods.

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