The Share Mortgage Agreement is a crucial security document used in Hong Kong's financial and corporate landscape when shares are being provided as collateral for financial obligations. It's commonly used in loan transactions, corporate financing, and investment arrangements where a lender or financial institution requires security over shares. The document must comply with Hong Kong's legal requirements, particularly the Companies Ordinance and Securities and Futures Ordinance, and includes essential provisions regarding the creation and perfection of security, voting rights, dividends, and enforcement mechanisms. The Share Mortgage Agreement typically accompanies a facility agreement or other principal financing document and requires registration with the Companies Registry in Hong Kong within one month of creation to ensure its enforceability.

1. Parties: Identification of the Mortgagor (share owner) and Mortgagee (security taker), including registration numbers and registered addresses

2. Background: Context of the security arrangement, reference to any facility agreement or underlying obligations, and description of the shares being mortgaged

3. Definitions and Interpretation: Definitions of key terms, interpretation rules, and references to statutory provisions

4. Creation of Security: Express provisions creating the mortgage over the shares, including the secured obligations

5. Perfection of Security: Requirements for perfecting the security, including share certificates delivery, signing of transfer forms, and registration requirements

6. Representations and Warranties: Mortgagor's representations regarding ownership, authority, and absence of encumbrances on the shares

7. Covenants: Positive and negative covenants relating to the mortgaged shares, including restrictions on disposal and further encumbrance

8. Dividends and Voting Rights: Provisions regarding the exercise of voting rights and treatment of dividends before and after enforcement

9. Events of Default: Circumstances constituting default, including cross-references to any facility agreement

10. Enforcement: Powers and remedies of the Mortgagee upon default, including power of sale and appointment of receiver

11. Power of Attorney: Appointment of Mortgagee as attorney to perfect security and exercise rights after default

12. Further Assurance: Obligation to execute further documents and take additional steps to perfect security

13. Notices: Process and requirements for serving notices under the agreement

14. Assignment and Transfer: Provisions regarding the ability to assign or transfer rights under the mortgage

15. Governing Law and Jurisdiction: Specification of Hong Kong law as governing law and submission to Hong Kong courts