Share Charge Agreement Template for Germany

A Share Charge Agreement is commonly used in German financing transactions where shares in a company are provided as security for financial obligations such as loans or other debt instruments. The document establishes the terms under which shares are charged, including the scope of the security interest, perfection requirements under German law, voting rights arrangements, and enforcement procedures. It is particularly relevant in acquisition financing, corporate restructurings, and general corporate lending where share security is required. The agreement must comply with German civil and corporate law requirements, including specific formalities for creating valid security over shares. The document typically contains detailed provisions regarding the exercise of shareholder rights before and after enforcement, as well as necessary mechanisms for realizing the security in accordance with German law.

1. Parties: Identification of the chargor (share owner), chargee (beneficiary), and the company whose shares are being charged

2. Background: Context of the transaction, reference to any facility agreement or main transaction documents, and purpose of the share charge

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

4. Creation of Security: Core provisions establishing the security interest over the shares

5. Perfection of Security: Requirements and procedures for perfecting the security interest, including registration requirements

6. Representations and Warranties: Chargor's representations regarding ownership, authority, and status of the shares

7. Covenants: Positive and negative obligations of the chargor regarding the charged shares

8. Voting Rights and Dividends: Provisions governing exercise of voting rights and receipt of dividends before and after enforcement

9. Enforcement: Circumstances and procedures for enforcing the security interest

10. Power of Attorney: Appointment of the chargee as attorney for specific purposes

11. Further Assurance: Obligation to take additional actions to perfect or protect the security

12. Notices: Communication procedures between parties

13. Assignment and Transfer: Provisions regarding transfer of rights under the agreement

14. Governing Law and Jurisdiction: Specification of German law as governing law and jurisdiction for disputes