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The Collateral Sharing Agreement is essential in complex financing transactions where multiple creditors hold security interests over the same collateral. This document, governed by Hong Kong law, is typically used in syndicated lending, project finance, and other structured finance transactions where security needs to be shared efficiently among various creditors. It establishes the framework for managing shared security interests, including appointment of a security agent, ranking of creditors' claims, enforcement procedures, and distribution of proceeds. The agreement ensures compliance with Hong Kong security and property laws while providing clarity on parties' rights and obligations. It is particularly important in cross-border transactions where Hong Kong law governs the security arrangements.

1. Parties: Identifies all parties to the agreement, including security agent(s), creditors, and any other relevant parties

2. Background: Sets out the context of the agreement, including reference to underlying facility agreements and security documents

3. Definitions and Interpretation: Defines key terms and establishes interpretation principles

4. Designation of Security Agent: Appointment and authority of the security agent to hold and manage shared collateral

5. Declaration of Trust: Creation of trust over the security interests and proceeds for the benefit of secured parties

6. Sharing and Ranking of Security: Establishes how security interests are shared and the ranking of different creditor claims

7. Application of Proceeds: Details the waterfall for distribution of enforcement proceeds

8. Decision Making: Procedures for making decisions regarding the shared collateral, including voting rights

9. Enforcement: Rights and procedures for enforcing security interests

10. Payment Mechanics: Procedures for handling payments and distributions

11. Changes to Parties: Process for transfers, assignments, and accession of new parties

12. Costs and Expenses: Allocation of costs related to the administration and enforcement of shared security

13. Indemnities: Protections for the security agent and other parties

14. Communications: Requirements for notices and other communications

15. Governing Law and Jurisdiction: Specifies Hong Kong law as governing law and jurisdiction for disputes