Pledge Of Shares Agreement Template for Switzerland

A Swiss law-governed agreement that creates a security interest over shares in a company, whereby a shareholder (pledgor) grants a pledge over their shares to a secured party (pledgee) as security for specified obligations. The agreement is structured in accordance with Swiss legal requirements, particularly the Swiss Code of Obligations and Swiss Civil Code, and includes detailed provisions regarding the creation, maintenance, and enforcement of the pledge, as well as the rights and obligations of the parties during the pledge period. It contains specific Swiss law mechanisms for pledge perfection and enforcement, making it distinct from security agreements in other jurisdictions.

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What is a Pledge Of Shares Agreement?

The Pledge of Shares Agreement is a crucial security document used in Swiss financing transactions where shares are provided as collateral for loans or other obligations. It is commonly used in acquisition financing, corporate lending, and other secured transactions where a lender requires security over shares in a Swiss company. The agreement must comply with specific requirements under Swiss law, particularly the Swiss Code of Obligations and Swiss Civil Code, regarding the creation and perfection of security interests. The document typically includes detailed provisions about the pledged shares, the secured obligations, voting rights, dividend rights, and enforcement mechanisms. This type of agreement is particularly important in corporate restructurings, acquisition finance, and general corporate finance transactions where share security is required.

What sections should be included in a Pledge Of Shares Agreement?

1. Parties: Identification of the Pledgor (shareholder), Pledgee (security taker), and the Company whose shares are being pledged

2. Background: Context of the pledge agreement, including reference to the underlying obligation being secured

3. Definitions: Definitions of key terms used throughout the agreement

4. Object of Pledge: Detailed description of the shares being pledged, including number, class, and nominal value

5. Creation of Pledge: Provisions establishing the pledge and the steps required to perfect it under Swiss law

6. Secured Obligations: Definition and scope of the obligations secured by the pledge

7. Representations and Warranties: Pledgor's confirmations regarding ownership, authority, and absence of encumbrances

8. Rights and Obligations During Pledge Period: Rules regarding voting rights, dividends, and other shareholder rights during the pledge period

9. Events of Default: Circumstances triggering enforcement rights

10. Enforcement: Procedures and rights for enforcing the pledge in accordance with Swiss law

11. Release of Pledge: Conditions and process for releasing the pledge

12. Notices: Communication requirements and contact details

13. Governing Law and Jurisdiction: Confirmation of Swiss law governance and jurisdiction

14. Miscellaneous: Standard boilerplate provisions including severability, amendments, and counterparts

What sections are optional to include in a Pledge Of Shares Agreement?

1. Tag-Along Rights: Required when existing shareholders' agreements contain tag-along rights that need to be addressed

2. Board Approval Requirements: Needed when the company's articles require board approval for share transfers or pledges

3. Bank Account Details: Required when dividends or other payments are to be directed to specific accounts

4. Security Agent Provisions: Needed in syndicated facilities where a security agent holds the pledge on behalf of multiple secured parties

5. Further Assurance: Additional provisions for future actions required to perfect or maintain the pledge

6. Power of Attorney: Optional authorization for the pledgee to act on behalf of the pledgor in certain circumstances

What schedules should be included in a Pledge Of Shares Agreement?

1. Schedule 1 - Share Details: Detailed description of the pledged shares including share certificate numbers and shareholding percentage

2. Schedule 2 - Form of Notice to Company: Template for notifying the company of the pledge

3. Schedule 3 - Company Acknowledgment: Form of company's acknowledgment of the pledge

4. Schedule 4 - Secured Obligations: Detailed description of the underlying obligations being secured

5. Schedule 5 - Corporate Authorizations: Copies of relevant corporate approvals and resolutions

6. Appendix A - Share Certificates: Copies of the share certificates being pledged

7. Appendix B - Articles of Association: Copy of the company's current articles of association

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents

Jurisdiction

Switzerland

Publisher

Genie AI

Document Type

Security Agreement

Cost

Free to use

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