¶¶Òõ¶ÌÊÓƵ

A Share Charge Agreement is a crucial security document used in Indian corporate finance transactions where shares are provided as collateral for loans or other obligations. This document is commonly used in various financing arrangements, including term loans, working capital facilities, and acquisition financing. The agreement must comply with Indian regulatory requirements, particularly the Companies Act 2013, SEBI regulations, and relevant state stamp duty laws. It contains detailed provisions regarding the creation and perfection of the charge, maintenance of security value, voting rights, dividend treatment, and enforcement procedures. The document becomes especially important in scenarios involving corporate restructuring, secured lending, or investment transactions where shares serve as security.

1. Parties: Identification of the Chargor (share owner), Chargee (security holder), and the Company whose shares are being charged

2. Background: Context of the transaction, reference to the underlying facility/loan agreement, and purpose of the share charge

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

4. Creation of Charge: Core provisions creating the security interest over the shares, including nature and scope of the charge

5. Perfection of Security: Requirements for perfecting the security, including registration with ROC, deposit of share certificates, and filing requirements

6. Representations and Warranties: Statements by the Chargor regarding ownership, authority, and status of the charged shares

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

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

9. Events of Default: Circumstances that trigger enforcement rights

10. Enforcement: Rights and remedies of the Chargee upon occurrence of an Event of Default

11. Power of Attorney: Appointment of Chargee as attorney for specific purposes

12. Further Assurance: Obligation to execute further documents and take additional steps if required

13. Notices: Process and requirements for serving notices under the agreement

14. Governing Law and Jurisdiction: Law governing the agreement and courts having jurisdiction