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The Security Sharing Agreement is essential in complex financing transactions where multiple parties hold or benefit from security interests over the same assets. This document is particularly relevant in Hong Kong's dynamic financial market, where sophisticated financing structures are common. The agreement becomes necessary when there are multiple secured creditors, such as in syndicated loans, bond issuances, or mixed financing arrangements. It sets out the crucial mechanics for sharing security interests, establishing priority rights, and coordinating enforcement actions. The Security Sharing Agreement must comply with Hong Kong law requirements, particularly the Securities and Futures Ordinance and Companies Ordinance, while providing practical solutions for security sharing arrangements. It includes provisions for the appointment of security agents, the treatment of different classes of secured debt, and the procedures for distributing enforcement proceeds.

1. Parties: Identifies and defines all parties to the agreement, including security providers, security agents, and beneficiaries

2. Background: Sets out the context of the agreement, including reference to underlying facilities or obligations and the purpose of the security sharing arrangement

3. Definitions and Interpretation: Defines key terms used throughout the agreement and establishes interpretation principles

4. Security Sharing Principles: Establishes the fundamental principles of how security interests will be shared among the parties

5. Secured Obligations: Defines and describes the obligations that are secured under the arrangement

6. Security Interest Creation and Perfection: Details how security interests are created, maintained, and perfected

7. Ranking and Priority: Establishes the priority and ranking of different security interests and parties' claims

8. Administration of Security: Sets out how the security interests will be administered, including the appointment and role of any security agent

9. Enforcement: Details the circumstances and procedures for enforcing security interests

10. Application of Proceeds: Specifies how proceeds from enforcement or realization will be distributed

11. Representations and Warranties: Contains standard and specific representations and warranties from all parties

12. Undertakings: Sets out ongoing obligations and commitments of the parties

13. Costs and Expenses: Allocates responsibility for costs and expenses related to the agreement

14. Changes to Parties: Procedures for adding or removing parties to the agreement

15. Notices: Specifies how formal communications between parties should be made

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

17. Execution: Formal execution blocks for all parties