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Security Agreement Form for Hong Kong

Security Agreement Form Template for Hong Kong

A comprehensive security agreement governed by Hong Kong law that creates and evidences a security interest over specified assets in favor of a secured party. The document establishes the terms and conditions under which security is granted, including detailed provisions for the creation, perfection, maintenance, and enforcement of security interests. It complies with Hong Kong legal requirements, including the Companies Ordinance and Conveyancing and Property Ordinance, and includes necessary provisions for registration with the Companies Registry where required. The agreement contains robust enforcement mechanisms and is structured to be effective in Hong Kong courts.

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What is a Security Agreement Form?

The Security Agreement Form is a crucial document in Hong Kong's commercial and financial landscape, used to create legally enforceable security interests over various types of assets. It is commonly employed in lending transactions, corporate finance, and other commercial arrangements where creditors require security for their exposure. The agreement must comply with Hong Kong's legal framework, particularly the Companies Ordinance and Conveyancing and Property Ordinance, and typically includes provisions for registration, perfection, and enforcement of security interests. The document is essential for both financial institutions and businesses seeking to structure secured transactions, providing a framework for protecting the interests of secured creditors while ensuring compliance with local regulatory requirements.

What sections should be included in a Security Agreement Form?

1. Parties: Identification of the security provider/chargor and the security taker/chargee with full legal names and registration details

2. Background: Context of the security arrangement, reference to any facility agreement or underlying obligations

3. Definitions and Interpretation: Definitions of key terms and interpretation rules, including references to any facility agreement definitions

4. Creation of Security: Express provisions creating the security interest and specifying its nature (fixed/floating charge, pledge, etc.)

5. Secured Obligations: Definition and scope of the obligations being secured

6. Representations and Warranties: Security provider's representations regarding ownership, authority to grant security, and status of collateral

7. Covenants: Positive and negative obligations of the security provider regarding the collateral

8. Further Assurance: Obligation to execute additional documents and take actions to perfect security

9. Enforcement: Rights and remedies upon default, including power of sale and appointment of receivers

10. Notices: Process for giving notices under the agreement

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

12. Governing Law and Jurisdiction: Specification of Hong Kong law and jurisdiction

What sections are optional to include in a Security Agreement Form?

1. Security Over Bank Accounts: Specific provisions for security over bank accounts, used when bank accounts form part of the collateral

2. Security Over Shares: Specific provisions for share charges, including voting rights and dividends, used when shares form part of the collateral

3. Security Over Intellectual Property: Specific provisions for IP rights, used when IP forms part of the collateral

4. Security Over Insurance Policies: Provisions regarding assignment of insurance policies, used when insurance forms part of the collateral

5. Security Over Contracts: Provisions for assignment of contractual rights, used when contracts form part of the collateral

6. Currency Provisions: Provisions dealing with multiple currencies, used in cross-border transactions

7. Parallel Debt: Creates parallel payment obligations, used in syndicated facilities

8. Power of Attorney: Appointment of security taker as attorney, used when stronger enforcement powers are required

What schedules should be included in a Security Agreement Form?

1. Schedule 1 - Collateral Description: Detailed description of all assets subject to the security interest

2. Schedule 2 - Form of Notice to Account Bank: Template notice to be sent to banks for charged accounts

3. Schedule 3 - Form of Acknowledgment: Template acknowledgment from third parties (e.g., account banks)

4. Schedule 4 - Perfection Requirements: List of required filings and registrations for different types of collateral

5. Schedule 5 - Existing Security Interests: List of permitted existing security interests over the collateral

6. Schedule 6 - Securities/Investments: Details of charged shares or other securities when applicable

7. Appendix 1 - Required Filings: Checklist of all required regulatory filings and registrations

8. Appendix 2 - Specified Contracts: List of material contracts subject to security when applicable

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

Hong Kong

Publisher

Genie AI

Cost

Free to use

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