The Collateral Account Agreement is a critical security document used in Hong Kong financial transactions where a party needs to grant security over a bank account and its contents. It is commonly used in lending arrangements, structured finance transactions, and security packages for larger financial deals. The agreement needs to comply with Hong Kong's legal and regulatory requirements, including the Securities and Futures Ordinance and Banking Ordinance. It typically accompanies facility agreements or other primary financing documents and forms part of a broader security package. The document outlines the creation of security interests, operational controls, rights of enforcement, and includes necessary provisions for perfection of security under Hong Kong law. It is particularly important in structured finance transactions and secured lending arrangements where account collateral forms a key part of the security package.

1. Parties: Identifies and defines the parties to the agreement - typically the account holder/security provider, the secured party, and potentially the account bank

2. Background: Sets out the context of the agreement, including reference to any related credit facilities or primary obligations being secured

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

4. Creation and Nature of Security: Establishes the security interest being created over the collateral account and its contents

5. Perfection and Further Assurance: Details the requirements for perfecting the security interest and obligations to execute further documents if needed

6. Collateral Account Operation: Specifies how the collateral account will be operated, including deposit and withdrawal rights

7. Rights and Obligations: Sets out the ongoing rights and obligations of all parties regarding the collateral account

8. Representations and Warranties: Contains standard and specific representations and warranties from the account holder

9. Enforcement: Details the circumstances and methods of enforcing the security interest

10. Power of Attorney: Grants power of attorney to the secured party for specific purposes

11. Expenses and Indemnities: Allocates costs and establishes indemnification obligations

12. Notices: Specifies how formal notices must be given between parties

13. Assignment and Transfer: Sets out if and how rights under the agreement may be assigned or transferred

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

15. Counterparts: Allows execution in multiple counterparts