Additional Covenants – A share seizure agreement typically gives the lender the benefit of several specific covenants with respect to the shares, including specific rights regarding the voting of the shares before and after the occurrence of a default event, the treatment and entitlement to dividends received before and after the occurrence of a default event. and share-specific insurance and guarantees. To the extent that a shareholders` agreement contains restrictive covenants with respect to shares, such covenants may be voided with the necessary agreement of other shareholders on the pledge received in the same document or otherwise dealt with in the share seizure agreement. These additional share-related covenants are generally not included in a GSA, which often deals only very broadly with the attributes of the specific collaterals subject to the GSA. Borrower Share Pledge means the pledging of the borrower`s shares granted by the parent company to the lender as part of a notarial pledge deed of the borrower`s shares between the lender as a pledge creditor and the parent company as a pledge creditor, which are dated to the date or date of this Agreement. As part of the Government of Ontario`s ongoing efforts to update and modernize business law, more than 30 provincial statutes have been amended by legislation to modernize various statutes administered by the Ministry of Government Services or relating to the Ministry of Government Services (formerly Bill 152) (the “Act”). The Personnel Safety Act (PPSA) is one of the laws that has been significantly amended by law. This abridged article will briefly relegate some of the most important changes that have practical and everyday significance. Definition of “debtors” The law extends the definition of “debtor” to a person who “has or has rights in the security rights, including a successor or successor to a debtor`s interest in the security rights”. It is important that the new definition explicitly specifies that the person who must pay or perform other secured obligations may be different from the person who has or has security rights. From a practical point of view, this eliminates the need to obtain a guarantee from a person holding guarantees if the only reason for this guarantee is to allow the insured party to acquire a valid interest in those guarantees. For example, when a shareholder of a borrower is required to mortgage shares as collateral for a loan to the borrower, but is not otherwise required to guarantee the debt, we often obtain a “limited recourse guarantee” to create a bond that can be secured by the seizure of shares.
By broadening the definition of debtor in the law, such a shareholder will simply be able to grant a pledge without having to provide a limited remedy guarantee. Another important change to the PPSA in the law is that the PPSA applies to leases with a term of more than one year. The PPSA applies to such leasing agreements, “even if the lease may not guarantee payment or performance of an obligation.” Whether leasing is a “real leasing” or a “lease” has been the subject of significant litigation over the years. Since all leases (regardless of their nature) with a term of more than one year are subject to the PPSA, lessors (or their lawyers) must file financing statements and, if not, comply with the provisions of ppSA regarding these leases. The lawyer is not required to further analyze factors such as the identity of the lessor, the value of any call options and the intention of the parties to determine whether the registration of a financing statement is necessary to protect the interests of the lessor. . . .