Document background
The Share Mortgage Agreement is a crucial document in Canadian corporate finance and secured lending transactions. It is typically used when a shareholder needs to obtain financing while retaining beneficial ownership of their shares, or when a corporation requires additional security for a loan or other obligations. The agreement must carefully balance the rights of the mortgagee to enforce their security interest with the mortgagor's ongoing rights as a shareholder. It needs to comply with federal legislation such as the Bank Act and Canada Business Corporations Act, as well as provincial securities laws and personal property security legislation. The document includes detailed provisions for share certificate handling, registration of security interests, voting rights, dividend treatments, and enforcement mechanisms in case of default.
