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Commercial Security Agreement for Hong Kong

Commercial Security Agreement Template for Hong Kong

A comprehensive legal document governed by Hong Kong law that creates and evidences a security interest over specified assets or property in favor of a secured party. The agreement operates within Hong Kong's common law framework and complies with local registration requirements under various ordinances including the Companies Ordinance and Registration of Personal Property Security Ordinance. It details the nature and extent of the security interest, the secured obligations, rights and obligations of parties, enforcement mechanisms, and includes provisions for perfection and maintenance of the security interest in accordance with Hong Kong legal requirements.

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Commercial Security Agreement

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What is a Commercial Security Agreement?

The Commercial Security Agreement is a fundamental document in secured lending transactions under Hong Kong law, used when a party (security provider) grants security interests over specific assets to secure obligations owed to another party (security taker). This document is essential in various commercial contexts, from simple bilateral lending arrangements to complex syndicated facilities. It must comply with Hong Kong's regulatory requirements, including registration obligations under the Companies Ordinance and other relevant legislation. The agreement typically includes detailed provisions on the creation, perfection, and enforcement of security interests, reflecting Hong Kong's common law principles and statutory requirements. It's particularly important in commercial financing transactions where lenders require collateral to secure their exposure and need a robust legal framework for enforcement.

What sections should be included in a Commercial Security Agreement?

1. Parties: Identification of the secured party (security taker) and the grantor (security provider), including full legal names and registration details

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

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

4. Grant of Security Interest: Core provision creating the security interest, describing its nature (fixed/floating charge, pledge, etc.) and scope

5. Secured Obligations: Definition and scope of the obligations being secured, including principal, interest, fees, and other amounts

6. Collateral: Detailed description of the assets over which security is granted

7. Representations and Warranties: Grantor's confirmations regarding ownership, authority, and status of the collateral

8. Covenants: Ongoing obligations of the grantor regarding maintenance, insurance, and dealing with the collateral

9. Further Assurance: Grantor's obligations to execute additional documents and take actions to perfect and protect the security

10. Enforcement: Rights and remedies of the secured party upon default, including power of sale and appointment of receivers

11. Power of Attorney: Appointment of the secured party as attorney to perfect or enforce the security interest

12. Payments and Proceeds: Application of proceeds from enforcement and order of priority

13. General Provisions: Standard boilerplate clauses including notices, amendments, assignments, governing law

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

1. Intercreditor Provisions: Required when multiple secured parties are involved, establishing priority and coordination among different security interests

2. Special Asset Provisions: Needed when specific types of assets (e.g., intellectual property, shares, bank accounts) require special treatment

3. Currency Provisions: Required when secured obligations or collateral involve multiple currencies

4. Tax Provisions: Detailed tax provisions needed when security arrangement has significant tax implications

5. Insurance Requirements: Detailed insurance provisions when collateral requires specific insurance coverage

6. Regulatory Compliance: Required when the security arrangement is subject to specific regulatory requirements

7. Security Trust Provisions: Needed when security is held on trust for multiple beneficiaries

What schedules should be included in a Commercial Security Agreement?

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

2. Schedule 2 - Form of Notice: Standard forms of notices to be given to third parties (e.g., account banks, insurers)

3. Schedule 3 - Existing Security Interests: List of permitted existing security interests affecting the collateral

4. Schedule 4 - Required Filings and Registrations: List of all necessary registrations and filings to perfect the security

5. Schedule 5 - Form of Accession Deed: Standard form for additional parties to accede to the security agreement

6. Appendix A - Registration Particulars: Details required for registration of the security interest with relevant authorities

7. Appendix B - Powers of Enforcement: Detailed description of enforcement powers and procedures

Authors

Alex Denne

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

Jurisdiction

Hong Kong

Document Type

Service Agreement

Cost

Free to use
Relevant legal definitions


















































Clauses








































Relevant Industries

Banking and Financial Services

Commercial Lending

Asset Finance

Corporate Finance

Real Estate

Manufacturing

Trading and Commerce

Technology

Infrastructure

Professional Services

Retail

Wholesale

Construction

Logistics

Import/Export

Relevant Teams

Legal

Finance

Risk Management

Compliance

Treasury

Credit Administration

Corporate Secretarial

Security Administration

Transaction Management

Portfolio Management

Corporate Banking

Commercial Banking

Relevant Roles

Chief Legal Officer

Legal Counsel

Finance Director

Chief Financial Officer

Risk Manager

Credit Manager

Commercial Director

Security Trustee

Loan Officer

Compliance Officer

Corporate Secretary

Transaction Manager

Portfolio Manager

Asset Manager

Treasury Manager

Banking Relationship Manager

Security Administrator

Industries









Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks, 聽Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination, 聽Severance Pay, Governing Law, Entire Agreemen

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