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Deed Of Charge And Assignment Template for Hong Kong

A Deed of Charge and Assignment is a formal security document used in Hong Kong to create and perfect security interests over various types of assets. This document establishes both a fixed and floating charge over specified assets and includes an assignment of related rights, providing the secured party with comprehensive security protection. The deed must comply with Hong Kong law requirements for the creation and registration of security interests, including specific formalities required for deeds under Hong Kong's Conveyancing and Property Ordinance and registration requirements under the Companies Ordinance where applicable.

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What is a Deed Of Charge And Assignment?

The Deed of Charge and Assignment is a crucial security document used in Hong Kong financial transactions where a party (the Chargor) grants security over its assets to secure its obligations to another party (the Chargee). This document is commonly used in loan transactions, project financing, and general corporate financing arrangements. It creates security through both a charge mechanism and an assignment of rights, providing comprehensive security protection. The deed must be executed in accordance with Hong Kong law requirements and typically requires registration with the Hong Kong Companies Registry when the Chargor is a Hong Kong company. The document is essential in transactions where lenders require robust security packages and is often part of a broader suite of finance documents.

What sections should be included in a Deed Of Charge And Assignment?

1. Parties: Identification of the Chargor and Chargee, including their full legal names, registration numbers (if companies), and registered addresses

2. Background: Recitals explaining the context of the security arrangement, typically referencing any underlying facility or loan agreement

3. Definitions and Interpretation: Definitions of key terms used throughout the deed and interpretation clauses

4. Creation of Security: Core charging provisions creating the security interest over the charged assets

5. Assignment: Provisions dealing with the assignment of rights, title and interest in the charged assets

6. Representations and Warranties: Statements of fact and assurances given by the Chargor regarding their capacity and the charged assets

7. Covenants: Positive and negative obligations of the Chargor regarding the charged assets and maintenance of security

8. Events of Default: Circumstances that will trigger enforcement rights

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

10. Power of Attorney: Appointment of the Chargee as attorney of the Chargor for security purposes

11. Further Assurance: Obligation to execute further documents and take additional steps to perfect the security

12. Notices: Provisions for how notices between parties should be given

13. Assignment and Transfer: Provisions regarding the ability to assign or transfer rights under the deed

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

15. Governing Law and Jurisdiction: Specification of Hong Kong law as governing law and submission to Hong Kong courts

What sections are optional to include in a Deed Of Charge And Assignment?

1. Security Margin: Include when there are specific requirements for maintaining a minimum security value ratio

2. Insurance: Include when charged assets need to be insured and insurance proceeds are part of the security

3. Bank Accounts: Include when the security includes charges over specific bank accounts

4. Intellectual Property: Include when the security includes charges over IP rights

5. Release and Discharge: Include when specific conditions for release of security need to be detailed

6. Currency Provisions: Include when dealing with multiple currencies or currency conversion requirements

7. Set-off Rights: Include when specific set-off rights need to be established

8. Tax Gross-up: Include when tax provisions affect the security arrangement

What schedules should be included in a Deed Of Charge And Assignment?

1. Schedule 1 - Charged Assets: Detailed description and/or list of all assets subject to the charge and assignment

2. Schedule 2 - Form of Notice: Standard form notices to be given to relevant third parties regarding the charge/assignment

3. Schedule 3 - Powers of Receiver: Detailed list of powers granted to any receiver appointed under the deed

4. Schedule 4 - Form of Acknowledgment: Standard form acknowledgments to be obtained from relevant third parties

5. Schedule 5 - Perfection Requirements: List of specific actions required to perfect the security in different jurisdictions

6. Appendix 1 - Related Rights: Detailed list of related rights included in the security package

7. Appendix 2 - Relevant Agreements: List and/or copies of relevant underlying agreements referenced in the deed

Authors

Alex Denne

Advisor @ 蜜桃传媒AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents

Jurisdiction

Hong Kong

Sector

Sales

Cost

Free to use

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