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Share Pledge Agreement for Hong Kong

Share Pledge Agreement Template for Hong Kong

A Share Pledge Agreement under Hong Kong law is a security document that creates a charge over shares owned by a pledgor in favor of a pledgee, typically to secure financial obligations. The agreement must comply with Hong Kong's Companies Ordinance and Securities and Futures Ordinance, including specific requirements for registration and perfection of security. It contains detailed provisions regarding voting rights, dividends, enforcement mechanisms, and regulatory compliance, particularly important in Hong Kong's sophisticated financial market context.

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What is a Share Pledge Agreement?

A Share Pledge Agreement is a crucial security document used in Hong Kong's financial and corporate landscape when a shareholder wishes to create security over their shares in favor of a lender or security taker. This document is commonly used in financing transactions, corporate restructurings, and investment arrangements where shares serve as collateral. The agreement must comply with Hong Kong's legal framework, particularly the Companies Ordinance and Securities and Futures Ordinance, and includes specific provisions for creation and perfection of security, voting rights, dividends, and enforcement mechanisms. It requires careful attention to registration requirements with the Companies Registry and, for listed shares, compliance with stock exchange regulations. The document is particularly relevant in Hong Kong's role as a major financial center, where share security arrangements are common in both domestic and cross-border transactions.

What sections should be included in a Share Pledge Agreement?

1. Parties: Identification of the Pledgor (shareholder) and Pledgee (security taker), including full legal names and registration details

2. Background: Context of the pledge arrangement, reference to any underlying obligations being secured

3. Definitions and Interpretation: Key terms used in the agreement, including 'Charged Shares', 'Secured Obligations', 'Security Period'

4. Creation of Security: Legal provisions establishing the pledge over the shares

5. Perfection of Security: Requirements for making the security effective, including registration and notice requirements

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

7. Covenants: Ongoing obligations of the Pledgor regarding the pledged shares

8. Voting Rights and Dividends: Provisions governing exercise of shareholder rights during the security period

9. Events of Default: Circumstances triggering enforcement rights

10. Enforcement: Rights and procedures for enforcing the security

11. Power of Attorney: Appointment of Pledgee as Pledgor's attorney for security purposes

12. Further Assurance: Obligation to execute additional documents if needed

13. Notices: Communication procedures between parties

14. Assignment and Transfer: Restrictions and permissions on transfer of rights

15. Governing Law and Jurisdiction: Hong Kong law as governing law and jurisdiction provisions

What sections are optional to include in a Share Pledge Agreement?

1. Security Agent Provisions: Required when the pledge is taken by a security agent on behalf of multiple beneficiaries

2. Stock Exchange Compliance: Required for pledges over shares in listed companies

3. Currency Provisions: Required for cross-border transactions with foreign currency elements

4. Multiple Pledgors: Required when shares are being pledged by multiple shareholders

5. Tax Gross-up: Required when withholding tax may apply to enforcement proceeds

6. Regulatory Compliance: Required when specific regulatory approvals or notifications are needed

What schedules should be included in a Share Pledge Agreement?

1. Schedule 1 - Share Details: Details of the pledged shares including company name, number of shares, share certificate numbers

2. Schedule 2 - Form of Transfer: Blank share transfer form to be signed and held in escrow

3. Schedule 3 - Notice of Pledge: Form of notice to be given to the company whose shares are pledged

4. Schedule 4 - Company Acknowledgment: Form of acknowledgment from the company regarding the share pledge

5. Schedule 5 - Initial Registration Requirements: List of documents and forms required for initial registration of the pledge

6. Appendix A - Board Resolutions: Form of board resolutions approving the pledge arrangement

Authors

Alex Denne

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

Jurisdiction

Hong Kong

Publisher

Ƶ

Document Type

Stock Agreement

Cost

Free to use
Relevant legal definitions







































Clauses






























Relevant Industries

Banking & Financial Services

Investment Management

Private Equity

Corporate Finance

Asset Management

Securities & Capital Markets

Family Offices

Venture Capital

Real Estate Investment

Infrastructure & Project Finance

Relevant Teams

Legal

Finance

Corporate Secretarial

Compliance

Risk Management

Investment

Corporate Finance

Operations

Treasury

Portfolio Management

Relevant Roles

Legal Counsel

Corporate Lawyer

Finance Director

Chief Financial Officer

Company Secretary

Compliance Officer

Security Trustee

Investment Manager

Corporate Finance Manager

Risk Manager

Transaction Manager

Portfolio Manager

Director of Operations

Chief Legal Officer

Banking Relationship Manager

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,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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