Intercompany Credit Agreement Template for Hong Kong

The Intercompany Credit Agreement is a crucial document used to formalize lending arrangements between affiliated companies within the same corporate group under Hong Kong law. It is particularly relevant for multinational corporations managing their internal funding needs, cash pooling arrangements, and group treasury operations. The agreement helps ensure regulatory compliance, especially with Hong Kong's Companies Ordinance and transfer pricing requirements, while documenting the terms of the loan, including amount, interest rates, repayment schedule, and security arrangements. This document is essential for maintaining proper corporate governance, satisfying audit requirements, and demonstrating arm's length dealings between related entities. It's commonly used in group restructuring, expansion projects, working capital funding, and other intra-group financing scenarios.

1. Parties: Identification of the lender and borrower entities, including registration details

2. Background: Context of the intercompany loan arrangement and relationship between the parties

3. Definitions and Interpretation: Definitions of key terms and interpretation rules for the agreement

4. The Facility: Details of the loan facility, including amount, purpose, and availability period

5. Interest: Interest rate, calculation method, and payment dates

6. Repayment: Terms and schedule for repayment of the principal amount

7. Prepayment: Conditions and process for early repayment of the loan

8. Tax Gross-Up and Indemnities: Provisions for tax implications and related indemnities

9. Representations and Warranties: Standard corporate representations and specific financial warranties

10. Information Undertakings: Requirements for financial and other information to be provided to the lender

11. General Undertakings: General covenants regarding corporate existence, compliance with laws, etc.

12. Events of Default: Circumstances constituting default and consequences

13. Changes to Parties: Rules regarding assignment and transfer of rights and obligations

14. Administration: Administrative provisions including notices and calculations

15. Governing Law and Jurisdiction: Choice of Hong Kong law and jurisdiction for disputes