Share Pledge Agreement (Canada)

Agreement granted by a debtor to a creditor in corporate shares to secure payment of a debt.

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A lender may want additional assurance that the borrower will repay a debt. This assurance usually takes the form of collateral, property pledged as security for a debt. To ensure that that collateral is collectible in the case of a default, the parties will enter into a security agreement, an agreement that sets out the rights of the lender with regard to the collateral.

This form is designed for situations when the debtor's shares in a corporation will serve as the security.

This form includes special formatting features to assist you in completing the agreement.

This form can be used in the following provinces: Alberta, British Columbia, Manitoba, New Brunswick, Newfoundland and Labrador, Northwest Territories, Nova Scotia, Nunavut, Ontario, Prince Edward Island, Saskatchewan and Yukon.
This is the content of the form and is provided for your convenience. It is not necessarily what the actual form looks like and does not include the information, instructions and other materials that come with the form you would purchase. An actual sample can also be viewed by clicking on the "Sample Form" near the top left of this page.
 
Share Pledge Agreement
 
THIS AGREEMENT is made as of       between      , of       (the “Pledgor”) and      , of       (the “Pledgee”).
 
WHEREAS the Pledgor is the owner of        shares (the “Pledged Shares”) in the capital stock of       (the “Corporation”);
AND WHEREAS the Pledgor has agreed to pledge the Pledged Shares as security for the repayment of all debts and liabilities, present or future, direct or indirect, absolute or contingent, matured or not, at any time owing by the Pledgor to the Pledgee or remaining unpaid by the Pledgor to the Pledgee (collectively the “Indebtedness”);
NOW THEREFORE  THIS AGREEMENT WITNESSES that in consideration of the premises, the covenants and agreements herein contained and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:
1.   Pledge of Shares. The Pledgor hereby mortgages, pledges, charges and grants to the Pledgee a security interest, as and by way of a fixed and specific mortgage, pledge, charge and security interest to and in favor of the Pledgee in the Pledged Shares as a general and continuing collateral security for the repayment of the Indebtedness.
2.   Covenants, Representations and Warranties of Pledgor. The Pledgor hereby covenants, represents and warrants to the Pledgee that:
(a)   the Pledgor is the sole beneficial owner of the Pledged Shares;
(b)   the Pledged Shares are not encumbered, pledged or charged in any manner whatsoever;
(c)   there are no outstanding calls for the Pledged Shares;
(d)   the Pledgor has full power, authority, right and capacity to pledge, assign and deliver the Pledged Shares as herein provided;
(e)   the execution and delivery of this Agreement by the Pledgor and the fulfillment of or compliance with the terms and conditions of this Agreement by the Pledgor will not violate, contravene, breach or offend against or result in any default under any indenture, mortgage, lease, agreement, instrument, statute, regulation, order, judgment, decree or law to which the Pledgor is party or by which the Pledgor is bound or affected; and
(f)   the Pledgor will not grant, bargain, sell, convey, assign, mortgage or grant a security interest in or otherwise deal with the Pledged Shares and will not make, create or give any charge, mortgage, pledge, lien, assignment or security interest upon any or all of the Pledged Shares until the Indebtedness is repaid in full.
3.   Dealings with Pledged Shares. Unless and until the security hereby constituted shall become enforceable in accordance with Section 4 of this Agreement:
(a)   all dividends or other distributions in respect of all or any of the Pledged Shares shall be for the account of the Pledgor;
(b)   the Pledgee shall provide the Pledgor or the Pledgors nominees with such proxies in favor of the Pledgor as are required by the Pledgor from time to time to allow the Pledgor to vote the Pledged Shares or to execute any consents or ratifications that may require execution by the Pledgor.
4.   Enforcement of Pledge. The security hereby constituted shall become enforceable upon default by the Pledgor in the payment of any amount or in the performance of any obligation in respect of the Indebtedness when due.
5.   Remedies of Pledgee. At any time after the security hereby constituted becomes enforceable, the Pledgee shall have the following rights, powers and remedies:
(a)   without any notice, advertisement or any other formality, to sell the Pledged Shares, or any of them, by public or private sale (and the Pledgee may be purchaser at any such sale), at any such place and on such terms as the Pledgee may reasonably determine, including, without limitation, terms that provide time for payment or credit, provided always that:
(i)   the Pledgee shall not be bound under any circumstances to realize upon the Pledged Shares to be sold, and shall not be responsible for retention or refusal to sell the Pledged Shares; nor shall the Pledgee be obliged to collect or see to the payment of dividends or other distributions on the Pledged Shares, but all such dividends and other distributions, if and when received by the Pledgor, shall be forthwith paid to the Pledgee (except as otherwise provided in this Agreement); and,
(ii)   the Pledgor shall be entitled to be credited only with the net proceeds of any sale or other disposition of the Pledged Shares when received by the Pledgee, and the net proceeds of such sale or other disposition shall mean all amounts received in cash by the Pledgee upon the sale or other disposition of all or any of the Pledged Shares, less all such indebtedness, obligations, payments, costs and expenses as are enumerated in subparagraph 7(a) of this Agreement;
(b)   the right and power to receive all dividends and other distributions in respect of any and all of the Pledged Shares and the right and power to:
(i)   represent the Pledged Shares at any meeting or meetings of the shareholders or unit holders of the Corporation; and,
(ii)   exercise all voting rights attached to any of the Pledged Shares.
(c)   the right to exercise any option or rights the Pledgor may at any time have to acquire additional units in the capital of the Corporation (provided that the Pledgee shall not be bound nor required to exercise any such option or right), and any advance made by the Pledgee for such purpose shall be added to the Indebtedness and all the provisions of the debt obligations in favor of the Pledgee shall apply thereto; and,
(d)   to revoke any proxy granted to the Pledgor or his nominee pursuant to subparagraph 3(b) of this Agreement.
(e)   The Pledgor acknowledges that the sale of any or all of the Pledged Shares shall be free of any right of redemption on the part of the Pledgor which are hereby waived and released.
6.   Monies Received as Trustee. After the security hereby constituted shall become enforceable, all moneys collected or received by the Pledgor in respect of the Pledged Shares shall be received in trust for the Pledgee and shall be forthwith paid to the Pledgee.
7.   Application of Proceeds of Sale. The proceeds of sale of the Pledged Shares and any dividends or other distributions received by the Pledgee may be applied or imputed to the Indebtedness as follows:
(a)   first, in payment of all costs and expenses incurred by the Pledgee or its nominee with reference to the Pledged Shares or the realization of the security thereof (including all legal fees on a solicitor and his own client basis and court costs) and all interest thereon, which costs and charges shall be deemed to constitute part of the Indebtedness;
(b)   second, in payment of the Indebtedness other than the costs and charged referred to in subparagraph 7(a) of this Agreement in such manner as the Pledgee, in its sole discretion, may determine; and,
(c)   third, any surplus shall be paid to the Pledgor or as otherwise required by law.
8.   Satisfaction of Indebtedness. The Pledgee shall not be required to surrender the Pledged Shares unless and until the Indebtedness is fully satisfied. Upon satisfaction of the Indebtedness in full, the Pledgee shall surrender the Pledged Shares and any other collateral security it holds of or from the Pledgor and shall release the Pledgor from the provisions of this Agreement and any such other collateral security.
9.   Remedies Cumulative. All rights and remedies of the Pledgee set out in this Agreement are cumulative and no right or remedy contained in this Agreement is intended to be exclusive, but each shall be in addition to any other right or remedy contained in this Agreement or any existing or further or other security document entered into between the Pledgor and the Pledgee or now or hereafter existing at law or in equity or by statute. It is further agreed that the Pledgee shall not be obliged to exhaust its recourse against any other party or parties, or against any other security or securities that it may hold before realizing or otherwise dealing with the Pledged Shares in such manner as the Pledgee considers desirable, and the Pledgee may grant time, renewals, extensions, indulgences, releases and discharges to, may abstain from taking securities from, or from perfecting securities of, may accept compositions from, and may otherwise deal with, all other parties and securities (including the Pledged Shares) as the Pledgee may see fit, without prejudice to the liability of the Pledgor to the Pledgee and without prejudice to the right of the Pledgee to hold, deal with the realize on the Pledged Shares in any manner (but not in violation of this Agreement) that the Pledgee considers desirable.
10.   Amendment, Waiver. This Agreement may be varied only by further written agreement executed by the Pledgor and the Pledgee. No waiver or consent by the Pledgee to or of any breach of or default in the observance of any terms, conditions, covenants, agreements, representations and warranties contained in this Agreement to be observed or performed shall be effective unless by written agreement executed and delivered by the Pledgee, and not such consent or wavier by the Pledgee shall constitute a consent or waiver by the Pledgee to or of any further breach of or default in this Agreement. No exercise or enforcement of any such rights and remedies available to the Pledgee hereunder or otherwise shall be held to exhaust any right or remedy of the Pledgee.
11.   Change in Pledged Shares. If the Pledged Shares or any of them are changed, reclassified, subdivided, consolidated or converted into a different number or class of shares or units or otherwise, the shares or other securities resulting from the change, reclassification, subdivision, consolidation or conversion shall be subject to the provisions of this Agreement.
12.   Registration of Pledged Shares. The Pledged Shares shall be registered in the name of the Pledgee and may from time to time be surrendered to the Corporation for cancellation, transfer, registration or in exchange for shares or units of different denominations. The Pledgor agrees that the responsibility of the Pledgee is limited to exercising, in regard to the certificate or certificates representing the Pledged Shares, the same degree of care which it gives to its own valuable property.
13.   No Merger. The pledge of the Pledged Shares shall not operate by way of merger of any indebtedness or liability of the Pledgor or of any other persons to the Pledgee under any deed, guarantee, contract, bill of exchange, promissory note or other instrument by which the same may now or at any time hereafter be represented or evidenced, and no judgment recovered by the Pledgee shall merge or in any way affect the security hereby created.
14.   Additional Security. This security is in addition to and not in substitution for any other security now or hereafter held by the Pledgee.
15.   Attachment. The Pledgor and the Pledgee expressly state that they intend that the pledge and security interest hereby constituted to attach upon execution and delivery of this Agreement. The Pledgor acknowledges receipt of a true copy of this Agreement.
16.   Further Assurances. The Pledgor shall from time to time on request by the Pledgee execute such further and other assurances, conveyances, mortgages, assignments, consents and documents as may be reasonably necessary for the purpose of perfecting the Pledgees security in the Pledged Shares.
17.   Notices. All notices and other communications required or permitted hereunder shall be in writing and, if delivered, shall be deemed to have been received on the day of delivery, and, if mailed by prepaid registered mail at any time other than during a discontinuance of postal service due to a strike, lockout or otherwise, shall be deemed to have been received two (2) business days after the postmarked date thereof. Notice of change of address for service shall also be governed by this Section. The addresses of the parties are as set out at the head of this Agreement.
18.   Successors and Assigns. This Agreement shall enure to the benefit of and be binding upon the parties hereto and their respective heirs, executors, administrators, successors and assigns.
19.   Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the Province of      .
 
IN WITNESS WHEREOF the parties hereto have executed this agreement as of the date first above written.
 
 
 
Witness
 
     
 
 
 
Witness
 
     
 
Number of Pages7
DimensionsDesigned for Letter Size (8.5" x 11")
EditableYes (.doc, .wpd and .rtf)
UsageUnlimited number of prints
Product number#28369
This is the content of the form and is provided for your convenience. It is not necessarily what the actual form looks like and does not include the information, instructions and other materials that come with the form you would purchase. An actual sample can also be viewed by clicking on the "Sample Form" near the top left of this page.
 
Share Pledge Agreement
 
THIS AGREEMENT is made as of       between      , of       (the “Pledgor”) and      , of       (the “Pledgee”).
 
WHEREAS the Pledgor is the owner of        shares (the “Pledged Shares”) in the capital stock of       (the “Corporation”);
AND WHEREAS the Pledgor has agreed to pledge the Pledged Shares as security for the repayment of all debts and liabilities, present or future, direct or indirect, absolute or contingent, matured or not, at any time owing by the Pledgor to the Pledgee or remaining unpaid by the Pledgor to the Pledgee (collectively the “Indebtedness”);
NOW THEREFORE  THIS AGREEMENT WITNESSES that in consideration of the premises, the covenants and agreements herein contained and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:
1.   Pledge of Shares. The Pledgor hereby mortgages, pledges, charges and grants to the Pledgee a security interest, as and by way of a fixed and specific mortgage, pledge, charge and security interest to and in favor of the Pledgee in the Pledged Shares as a general and continuing collateral security for the repayment of the Indebtedness.
2.   Covenants, Representations and Warranties of Pledgor. The Pledgor hereby covenants, represents and warrants to the Pledgee that:
(a)   the Pledgor is the sole beneficial owner of the Pledged Shares;
(b)   the Pledged Shares are not encumbered, pledged or charged in any manner whatsoever;
(c)   there are no outstanding calls for the Pledged Shares;
(d)   the Pledgor has full power, authority, right and capacity to pledge, assign and deliver the Pledged Shares as herein provided;
(e)   the execution and delivery of this Agreement by the Pledgor and the fulfillment of or compliance with the terms and conditions of this Agreement by the Pledgor will not violate, contravene, breach or offend against or result in any default under any indenture, mortgage, lease, agreement, instrument, statute, regulation, order, judgment, decree or law to which the Pledgor is party or by which the Pledgor is bound or affected; and
(f)   the Pledgor will not grant, bargain, sell, convey, assign, mortgage or grant a security interest in or otherwise deal with the Pledged Shares and will not make, create or give any charge, mortgage, pledge, lien, assignment or security interest upon any or all of the Pledged Shares until the Indebtedness is repaid in full.
3.   Dealings with Pledged Shares. Unless and until the security hereby constituted shall become enforceable in accordance with Section 4 of this Agreement:
(a)   all dividends or other distributions in respect of all or any of the Pledged Shares shall be for the account of the Pledgor;
(b)   the Pledgee shall provide the Pledgor or the Pledgors nominees with such proxies in favor of the Pledgor as are required by the Pledgor from time to time to allow the Pledgor to vote the Pledged Shares or to execute any consents or ratifications that may require execution by the Pledgor.
4.   Enforcement of Pledge. The security hereby constituted shall become enforceable upon default by the Pledgor in the payment of any amount or in the performance of any obligation in respect of the Indebtedness when due.
5.   Remedies of Pledgee. At any time after the security hereby constituted becomes enforceable, the Pledgee shall have the following rights, powers and remedies:
(a)   without any notice, advertisement or any other formality, to sell the Pledged Shares, or any of them, by public or private sale (and the Pledgee may be purchaser at any such sale), at any such place and on such terms as the Pledgee may reasonably determine, including, without limitation, terms that provide time for payment or credit, provided always that:
(i)   the Pledgee shall not be bound under any circumstances to realize upon the Pledged Shares to be sold, and shall not be responsible for retention or refusal to sell the Pledged Shares; nor shall the Pledgee be obliged to collect or see to the payment of dividends or other distributions on the Pledged Shares, but all such dividends and other distributions, if and when received by the Pledgor, shall be forthwith paid to the Pledgee (except as otherwise provided in this Agreement); and,
(ii)   the Pledgor shall be entitled to be credited only with the net proceeds of any sale or other disposition of the Pledged Shares when received by the Pledgee, and the net proceeds of such sale or other disposition shall mean all amounts received in cash by the Pledgee upon the sale or other disposition of all or any of the Pledged Shares, less all such indebtedness, obligations, payments, costs and expenses as are enumerated in subparagraph 7(a) of this Agreement;
(b)   the right and power to receive all dividends and other distributions in respect of any and all of the Pledged Shares and the right and power to:
(i)   represent the Pledged Shares at any meeting or meetings of the shareholders or unit holders of the Corporation; and,
(ii)   exercise all voting rights attached to any of the Pledged Shares.
(c)   the right to exercise any option or rights the Pledgor may at any time have to acquire additional units in the capital of the Corporation (provided that the Pledgee shall not be bound nor required to exercise any such option or right), and any advance made by the Pledgee for such purpose shall be added to the Indebtedness and all the provisions of the debt obligations in favor of the Pledgee shall apply thereto; and,
(d)   to revoke any proxy granted to the Pledgor or his nominee pursuant to subparagraph 3(b) of this Agreement.
(e)   The Pledgor acknowledges that the sale of any or all of the Pledged Shares shall be free of any right of redemption on the part of the Pledgor which are hereby waived and released.
6.   Monies Received as Trustee. After the security hereby constituted shall become enforceable, all moneys collected or received by the Pledgor in respect of the Pledged Shares shall be received in trust for the Pledgee and shall be forthwith paid to the Pledgee.
7.   Application of Proceeds of Sale. The proceeds of sale of the Pledged Shares and any dividends or other distributions received by the Pledgee may be applied or imputed to the Indebtedness as follows:
(a)   first, in payment of all costs and expenses incurred by the Pledgee or its nominee with reference to the Pledged Shares or the realization of the security thereof (including all legal fees on a solicitor and his own client basis and court costs) and all interest thereon, which costs and charges shall be deemed to constitute part of the Indebtedness;
(b)   second, in payment of the Indebtedness other than the costs and charged referred to in subparagraph 7(a) of this Agreement in such manner as the Pledgee, in its sole discretion, may determine; and,
(c)   third, any surplus shall be paid to the Pledgor or as otherwise required by law.
8.   Satisfaction of Indebtedness. The Pledgee shall not be required to surrender the Pledged Shares unless and until the Indebtedness is fully satisfied. Upon satisfaction of the Indebtedness in full, the Pledgee shall surrender the Pledged Shares and any other collateral security it holds of or from the Pledgor and shall release the Pledgor from the provisions of this Agreement and any such other collateral security.
9.   Remedies Cumulative. All rights and remedies of the Pledgee set out in this Agreement are cumulative and no right or remedy contained in this Agreement is intended to be exclusive, but each shall be in addition to any other right or remedy contained in this Agreement or any existing or further or other security document entered into between the Pledgor and the Pledgee or now or hereafter existing at law or in equity or by statute. It is further agreed that the Pledgee shall not be obliged to exhaust its recourse against any other party or parties, or against any other security or securities that it may hold before realizing or otherwise dealing with the Pledged Shares in such manner as the Pledgee considers desirable, and the Pledgee may grant time, renewals, extensions, indulgences, releases and discharges to, may abstain from taking securities from, or from perfecting securities of, may accept compositions from, and may otherwise deal with, all other parties and securities (including the Pledged Shares) as the Pledgee may see fit, without prejudice to the liability of the Pledgor to the Pledgee and without prejudice to the right of the Pledgee to hold, deal with the realize on the Pledged Shares in any manner (but not in violation of this Agreement) that the Pledgee considers desirable.
10.   Amendment, Waiver. This Agreement may be varied only by further written agreement executed by the Pledgor and the Pledgee. No waiver or consent by the Pledgee to or of any breach of or default in the observance of any terms, conditions, covenants, agreements, representations and warranties contained in this Agreement to be observed or performed shall be effective unless by written agreement executed and delivered by the Pledgee, and not such consent or wavier by the Pledgee shall constitute a consent or waiver by the Pledgee to or of any further breach of or default in this Agreement. No exercise or enforcement of any such rights and remedies available to the Pledgee hereunder or otherwise shall be held to exhaust any right or remedy of the Pledgee.
11.   Change in Pledged Shares. If the Pledged Shares or any of them are changed, reclassified, subdivided, consolidated or converted into a different number or class of shares or units or otherwise, the shares or other securities resulting from the change, reclassification, subdivision, consolidation or conversion shall be subject to the provisions of this Agreement.
12.   Registration of Pledged Shares. The Pledged Shares shall be registered in the name of the Pledgee and may from time to time be surrendered to the Corporation for cancellation, transfer, registration or in exchange for shares or units of different denominations. The Pledgor agrees that the responsibility of the Pledgee is limited to exercising, in regard to the certificate or certificates representing the Pledged Shares, the same degree of care which it gives to its own valuable property.
13.   No Merger. The pledge of the Pledged Shares shall not operate by way of merger of any indebtedness or liability of the Pledgor or of any other persons to the Pledgee under any deed, guarantee, contract, bill of exchange, promissory note or other instrument by which the same may now or at any time hereafter be represented or evidenced, and no judgment recovered by the Pledgee shall merge or in any way affect the security hereby created.
14.   Additional Security. This security is in addition to and not in substitution for any other security now or hereafter held by the Pledgee.
15.   Attachment. The Pledgor and the Pledgee expressly state that they intend that the pledge and security interest hereby constituted to attach upon execution and delivery of this Agreement. The Pledgor acknowledges receipt of a true copy of this Agreement.
16.   Further Assurances. The Pledgor shall from time to time on request by the Pledgee execute such further and other assurances, conveyances, mortgages, assignments, consents and documents as may be reasonably necessary for the purpose of perfecting the Pledgees security in the Pledged Shares.
17.   Notices. All notices and other communications required or permitted hereunder shall be in writing and, if delivered, shall be deemed to have been received on the day of delivery, and, if mailed by prepaid registered mail at any time other than during a discontinuance of postal service due to a strike, lockout or otherwise, shall be deemed to have been received two (2) business days after the postmarked date thereof. Notice of change of address for service shall also be governed by this Section. The addresses of the parties are as set out at the head of this Agreement.
18.   Successors and Assigns. This Agreement shall enure to the benefit of and be binding upon the parties hereto and their respective heirs, executors, administrators, successors and assigns.
19.   Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the Province of      .
 
IN WITNESS WHEREOF the parties hereto have executed this agreement as of the date first above written.
 
 
 
Witness
 
     
 
 
 
Witness
 
     
 

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