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The Collateral Security Agreement is a fundamental document in secured financing transactions under Hong Kong law, used when a party (the security provider) grants security interests over specific assets to secure obligations owed to another party (the security taker). This document is typically used in conjunction with facility agreements, loan documents, or other primary financing arrangements. It must comply with Hong Kong legal requirements for creating valid and enforceable security interests, including registration requirements under the Companies Ordinance where applicable. The agreement is crucial in commercial lending, project finance, acquisition finance, and general corporate financing transactions, providing lenders with security over various types of assets including shares, bank accounts, receivables, and other property.

1. Parties: Identifies the security provider/chargor and the security taker/chargee

2. Background: Sets out the context of the security arrangement, including reference to any underlying facility or credit agreement

3. Definitions and Interpretation: Defines key terms and sets out interpretation principles

4. Creation of Security: Contains the operative provisions creating the security interest over the collateral

5. Secured Obligations: Defines the obligations being secured by the collateral

6. Representations and Warranties: Security provider's representations regarding ownership, capacity, and status of collateral

7. Covenants: Ongoing obligations of the security provider regarding the collateral and maintenance of security

8. Events of Default: Specifies circumstances constituting default under the agreement

9. Enforcement: Sets out the security taker's rights and remedies upon default

10. Power of Attorney: Appointment of security taker as security provider's attorney for enforcement purposes

11. Further Assurance: Obligation to execute further documents and take additional steps if required

12. Continuing Security: Provisions establishing the security as continuing until full discharge

13. Discharge and Release: Conditions and process for releasing the security

14. Notices: Communication requirements and contact details

15. Assignment and Transfer: Rules regarding transfer of rights under the agreement

16. General Provisions: Standard boilerplate clauses including severability, amendments, counterparts