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The Collateral Sharing Agreement is essential in complex financing arrangements where multiple creditors hold security interests over the same collateral. Used primarily in syndicated lending, project finance, and restructuring scenarios in the UAE, this agreement establishes the mechanisms for sharing and enforcing security interests among different classes of creditors. It addresses crucial aspects such as ranking of claims, enforcement procedures, and distribution of proceeds, all while ensuring compliance with UAE security and banking regulations. The document is particularly important given the UAE's developing legal framework for security interests, including Federal Law No. 20 of 2016 and related Central Bank regulations. The agreement helps prevent conflicts between creditors and provides clarity on their respective rights and obligations in relation to shared collateral.

1. Parties: Identifies all parties to the agreement including creditors, security providers, and any security agent

2. Background: Sets out the context of the agreement, including reference to the underlying facilities and security interests being shared

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

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

5. Ranking and Priority: Details the ranking of security interests and priority of payments between the creditors

6. Enforcement of Security: Sets out the circumstances and process for enforcing security interests

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

8. Decision Making: Establishes the process for making decisions regarding the shared security, including voting rights and thresholds

9. Representations and Warranties: Contains representations and warranties from each party

10. Payments and Recoveries: Governs the treatment of payments received and recovery of amounts by creditors

11. Costs and Expenses: Allocates responsibility for costs and expenses related to the agreement and security enforcement

12. Changes to the Parties: Procedures for transfer of rights and obligations, and addition of new parties

13. Notices: Sets out the procedure for giving notices under the agreement

14. Governing Law and Jurisdiction: Specifies UAE law as governing law and establishes jurisdiction for disputes