Corporate Loan Agreement Template for Hong Kong

The Corporate Loan Agreement is a fundamental financing document used when a corporate entity seeks to obtain credit facilities from a financial institution in Hong Kong. This agreement is essential for both bilateral and syndicated lending arrangements, incorporating specific requirements under Hong Kong banking regulations and companies law. It establishes the legal framework for the lending relationship, covering crucial aspects such as facility terms, conditions precedent, drawdown mechanics, repayment obligations, and security arrangements. The document must comply with Hong Kong regulatory requirements, including those under the Banking Ordinance and Companies Ordinance, particularly regarding security registration and stamp duty obligations. It's typically used for various corporate financing purposes, including working capital, acquisition financing, project financing, or general corporate purposes.

1. Parties: Identifies the lender(s) and borrower(s) and their respective addresses

2. Background: Sets out the context of the loan and basic transaction structure

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

4. The Facility: Details the type, amount, and purpose of the loan facility

5. Conditions Precedent: Lists documents and conditions required before drawdown

6. Drawdown: Specifies drawdown mechanics, notice requirements, and availability period

7. Interest: Sets out interest rate, calculation periods, and payment dates

8. Repayment: Details repayment schedule, prepayment terms, and final maturity

9. Representations and Warranties: Lists borrower's confirmations about its status and capacity

10. Information Undertakings: Specifies ongoing financial and other information requirements

11. General Undertakings: Sets out positive and negative covenants

12. Financial Covenants: Establishes financial ratios and tests to be maintained

13. Events of Default: Lists circumstances allowing lender to accelerate the loan

14. Changes to Parties: Covers assignment and transfer provisions

15. Payment Mechanics: Details payment times, currencies, and set-off rights

16. Costs and Expenses: Allocates transaction costs and ongoing expenses

17. Notices: Specifies how formal communications should be made

18. Calculations and Certificates: Establishes basis for calculations and evidential value of certificates

19. General Provisions: Contains boilerplate provisions including partial invalidity and remedies

20. Governing Law and Enforcement: Specifies Hong Kong law as governing law and enforcement provisions